Ques: Who qualifies to be an NRI?
Ans. An individual will be treated as a resident in India in any previous year if he fulfills any of the following two conditions:
(a) he/she is in India in that year for period or periods amounting in all to 182 days or more, or
(b) Having within the four years preceding that year been in India for a period or periods amounting in all to 365 days or more, and has been in India for 60 days or more in that year.
As we all know tax implications are different for Non Resident Indian (NRI)
For example, any income that is accrued in India is taxable subject to the basic exemption of Rs.200,000/- This leads to a lot of confusion and NRIs often find themselves seeking the help of friends and relatives in India to understand, manage their taxes and for tax filing purposes.
Ques: What are the documents & other details required for filing tax return?
Ans. Apart from the basic details required for preparation of return (viz. name, address, father’s name, PAN, Ward, bank details) other documents required are:
- Month-wise details of income outside India with supporting documents;
- Details of tax deducted at source (TDS) outside India, if any;
- Copy of tax return filed in the foreign country, if any;
- Detail of Living Allowance and Indian salary in foreign currency if the Indian salary was received in foreign currency,Copy of Form 16 for salary income earned in India;
- Details of other income in India;
- Details of tax deducted at source in India (with copies of TDS certificates) other than salary;
- Whether employed in Indian company and sent abroad for project, and paid by Indian company in foreign;
- Residential status (i.e. No. of days you have stayed in India in the previous years)
The Double Tax Avoidance Agreements (DTAA) is essentially bilateral agreements entered into between two countries, in our case, between India and another foreign state.
Documents required for Double Taxation:
- Form 16
- W2 Form
- 12 months’ salary slips- IR
- US salary slips
- Duration of stay in India & Abroad for last 4 years and any other document of investment which is not shown in Form 16.
Ques: Are NRIs liable to file returns in India?
Ans. NRIs whose taxable Indian Income exceeds basic exemption limit of Rs.2,00,000 are liable to file Income Tax return.
However, they are required to file Income Tax return in India, if they have income from following sources even if taxable Income is below basic exemption
- Income from Short Term Capital Gain on equity shares or equity oriented mutual fund.
- Income from Long Term Capital Gains which are chargeable to tax.
Non-filing of Indian Income Tax return may lead to penalty of Rs.5000 for each year and prosecution.
Ques: What are the Incomes taxable for a NRI in India?
The Incomes taxable for a NRI in India are as follows:
- Income received/deemed to be received in India
- Income accruing or arising in India
- Income deemed to accrue or arise in India