NRI TAXATION

1. How do I assess my residency status?
For the following financial year you are considered an Indian resident: i. If you are staying in India for a period of at least 6 months during the fiscal year (182 days to be exact),
Hii. ii. In the previous year, you were in India for 2 months (60 days) a year and stayed for a whole year (365 days) in the last four years.
If you are an Indian citizen working abroad or a crew member on an Indian ship, only the first condition is applicable to you, meaning that if you spend at least 182 days in India, you are a resident.
The same applies to a person of Indian origin (PIO) visiting India. To these people, the second condition does not apply. A PIO is a person in India whose parents or grandparents were born.
You are an NRI if you do not fulfil any of the above criteria.
Is it possible to tax my international earnings?
Am I needed in India to file a return on income tax?
When is the last date for India to file an income tax return?
Do NRIs have a tax advance to pay?
a. Is it possible to tax my international earnings?
The NRI's income tax in India will depend on its status of residence for the year. Your global income is taxable in India if you are a citizen. Your profits received or accrued in India is taxable in India if your status is 'NRI.' Examples of income obtained or accrued in India are wages paid in India or salaries for service rendered in India, income from household property situated in India, capital gains on transfer of assets situated in India, income from fixed deposits or interest on savings bank accounts. Such income is taxable to the NRI. Outside India, income received is not taxable in India. Interest received is tax-free in the NRE account and the FCNR account. Profit in the account of an NGO is taxable by the NRI.
b. Am I needed in India to file a return on income tax?
NRI or not, any person whose income exceeds Rs.2.50,000 is required to file a tax return on income in India. Oh, uh, NRI
Case Reports studies:
Srishti lives in the USA and works there. She reviewed her Form 26AS online and pointed out that she listed the TDS entry for Rs 20,000. 30 percent of the interest received by her in her NGO account was deducted from this TDS. Srishti does not have any other earnings in India.
Is Srishti needed to pay any tax in India and is she required to file an income tax return?
Whether or not your income in India would be taxable depends on your citizenship status. First let's find out about the citizenship status for Srishti. She's an Indian citizen and has gone to the US for her work. If she spends 182 days or more in India, she'll be a resident. On 3 July 2017, Srishti left India and returned to India on 15 March 2018. Therefore, Srishti spent less than 182 days in India in the financial year starting on 1 April 2017 and ending on 31 March 2018. She must spend 182 days or more in India to qualify as a resident, since she is an Indian citizen working abroad. Therefore for income tax purposes in India, Srishti is an NRI. Only her income received or accrued in India is taxable in India in the case of Srishti. In India, her earnings in the USA are not taxable because she is an NRI. Interest received is taxable to the NRI in India. (Note that interest on the account of an NGO is taxable, while interest on the account of the NRE is exempt from tax). Srishti wants all the income she's received in India to add up. Interest received on the Rs 70,000 NGO account is Srishti's sole income. The minimum income exempt from tax is Rs 2.5 lakhs for the 2017-18 financial year. The overall income of Srishti in India is less than the minimum exempt sum and is therefore not subject to payment of any tax on it. Indeed, because she is not liable for any levy, she must demand a refund of the TDS deducted from her interest income. A refund can be obtained only by filing an income tax return for that financial year.
c. When is the last date of India's File Income T axe return?
The last date for filing an income tax return for NRIs in India is July 31st.
d. Do NRIs have a tax advance to pay?
If your tax liability for the financial year exceeds Rs 10,000, you are expected to pay advance tax. If you do not pay the advance tax, the interest referred to in Section 234B and Section 234C would apply.
2. For the NRI, net income
If you earn your salary in India or if anyone does so on your behalf, your salary revenue is taxable. It would also be subject to Indian tax laws if you are an NRI and you earn your salary directly from an Indian account. This revenue is charged at the rate at which you are a member.
Benefit from salary
Income from Home Property
Payments for rent rendered to the NRI
Some Sources' sales
Business and Professional Income
Benefit from Capital Gains
Unique allowance for profits from investments
What are the investments for which special care is eligible?
Specific clause on long-term capital gains
In order to support you with your IT return, would you like a CA?
a. Benefit from salary
If your services are rendered in India, salary income would be treated as emerging in India. So even though you may be an NRI, you would be taxed in India regardless of where you earn the income if your salary is charged for the services you render in India. If your employer is the government of India and you are a resident of India, wage income is also taxed in India if your service is made outside India. Remember that the salary of diplomats and ambassadors is tax free. In China, for a span of 3 years, Ajay worked on an Indian business project. Ajay wanted a salary in India to fulfil his family's needs and make payments for a housing loan. However, Ajay opted to earn it in China, because the salary earned by Ajay in India would have been taxed in accordance with Indian rules.
b. Income from Home Property
The NRI is taxable on the profits from a property located in India. This income is measured in the same way that it is calculated for a resident. This property may be empty or rented out. When a home loan exists, the NRI can assert a standard deduction of 30 percent, deduct property taxes and take advantage of an interest deduction. In compliance with Section 80C, the NRI is also entitled to a deduction for principal repayment. Under Section 80C, stamp duty and registration fees charged for the purchase of property can also be claimed. Household property income is taxed as applicable at slab rates. Nandini owns a house in Goa and while staying in Bangkok, she rented it. She has set up payments for rent to be paid directly from her Bangkok bank account. Nandini's income from this home, situated in India, is taxable in India.
c. Payments for rent rendered to the NRI
A tenant paying rent to the NRI owner must remember to subtract 30 percent of the TDS. Income may be obtained from an Indian account or from an NRI account based in the country in which it currently resides. Maria pays a monthly rent of Rs30,000 to her NRI landlord. It must subtract 30 percent of TDS or Rs 9,000 prior to moving the money to the landlord's account. Form 15CA must also be prepared by Maria and sent online to the Income Tax Department. Form 15CA must be submitted by a person making a remittance (payment) to a non-resident Indian. This form has to be submitted online. In certain cases prior to online uploading of Form 15CA, a certificate from a chartered accountant in Form 15CB is required. The CA certifies payment information, the TDS rate and the TDS deduction in Form 15CB, as provided for in Section 195 of the Income Tax Act, where any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of the nature and intent of the remittance. There is no requirement for Form 15CB if:
i. The amount of remission shall not exceed Rs 5,000,000 (total in the financial year). Only Form 15CA must be submitted in this situation.
Uh, ii, ii. Where the lower TDS is to be deducted and the certificate issued pursuant to Section 197 is to be deducted by order of the AO from the lower TDS.
They're iii. Where the transaction falls within the scope of Rule 37BB of the Income Tax Act, which lists 28 items, neither is required. Here, check out all of the list.
In all other situations, if a remittance is made outside India, the person making the remittance shall, after receipt of the certificate, take the CA certificate on Form 15CB and send Form 15CA to the Government online.
d. Some Sources' sales
In India, interest income held in Indian bank accounts from fixed deposits and savings accounts is taxable. Interest is tax-free on the NRE and FCNR accounts. Interest is entirely taxable on the NGO account.
e. Skilled and Company Profits
Any income from a company managed or founded in India received by the NRI is taxable to the NRI.
f. Benefit from Capital Gains
Any capital gain in connection with the transfer of capital assets located in India is taxable in India. Capital gains on Indian equity investments and shares are also taxable in India. The buyer must subtract TDS at 20 percent if you sell a home property and have a long-term capital gain. However by investing in a home in accordance with Section 54 or by investing in capital gains bonds in accordance with Section 54EC, you are entitled to claim an exemption from capital gains.
g. Unique allowance for profits from investments
It is taxed at 20 percent when an NRI invests in such Indian properties. If the only revenue earned by the NRI during the financial year is the special investment income and the TDS has been deducted from it then the NRI is not expected to file a tax return on the income.
h. What are the investments for which special care is eligible?
Income derived in foreign currency from Indian assets acquired:
i. Shares in a public or private corporation in India
Uh, ii, ii. Obligations issued by an Indian publicly traded company (not a private company)
They're iii. Deposits to banks and government corporations
Oh, uh. iv. All se se se, all

V. Other central government properties as stated for this reason in the Official Gazette.
For the computation of investment profits, no deduction under Section 80 is permitted.
i. Specific clause on long-term capital gains
In the case of long-term capital gains from the selling of these foreign assets, in compliance with Section 80, there is no indexation advantage and no deductions permitted. However under Section 115 F, you can make use of a tax exemption when the profit is reinvested in:
i. Shares in a company in India
Uh, ii, ii. Debts of a public company in India
- iii. In India, deposits with banks and public corporations
Oh, uh. iv. The Central Government's Securities
V. The NSC VI and VIII problems
In this case, if the expense of the new asset is less than the net consideration, capital gains are proportionately excluded. Note that if the purchased new asset is exchanged or sold back within 3 years, the exempted benefit will be added to the revenue in the sale/transfer year. Except when it becomes a resident, the advantages referred to above which be made available to the NRI before such an asset is transformed into money and upon submission by the NRI of a declaration for the application of the special provisions to the assessment officer. The NRI may opt out of these special provisions and the income (investment income and LTCG) in that case will be taxed in accordance with the normal provisions of the Income Tax Act.
j. In order to support you with your IT return, would you like a CA?
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3. Deductions from NRI and exemptions
NRIs are also allowed, similar to locals, to demand various deductions and exemptions from their overall income. Here these were discussed:
In compliance with Section 80C Deductions
Deductions approved under Section 80C for NRIs
a. In compliance with Section 80C Deductions
NRIs are also in control of most of the deductions referred to in Section 80. A maximum deduction of up to Rs 1.5 lakhs under Section 80C from the individual's gross total income is permitted for the financial year 2017-18.
b. Of the deductions mentioned in Section 80C, the permissible NRIs are:
i. Payment of the life insurance premium: the policy must be in the name of the NRI or on behalf of the spouse or any child (child may be dependent / independent, minor / major, or married / unmarried). The premium is less than 10% of the amount of insurance covered.
Uh, ii, ii. Children's school fees: tuition fees charged by any two children (including school, pre-school and nursery payments) to any school, college, university or other educational institution located within India for the purpose of full-time education.
They're iii. Principal repayment of the loan for the acquisition of the house property: the repayment of the loan taken for the purchase or building of the house property is permitted to be deducted. The transfer of such property to the NRI also allows for stamp duty, registration fees and other expenses.
Oh, uh. iv. Unit-linked insurance plan (ULIPS): ULIPS is sold under Section 80C with a life insurance deduction. It requires a contribution to the LIC mutual fund's unit-linked insurance plan, e.g. Dhanraksha 1989 and subscription to another UTI insurance scheme connected to units.
V. Investments in ELSS: In recent years, ELSS has been the most favoured choice as it helps you to assert a deduction under Section 80C up to Rs 1.5 lakhs, provides taxpayers with EEE (Exempt-Exempt-Exempt) benefits and at the same time provides an excellent opportunity to make a profit as these funds invest mainly in a diversified way in the stock sector.
4. Other Allowable Deductions
In addition to the deduction that the NRI can claim under Section 80C, it is also qualified under the Income Tax Acts discussed here to claim various other deductions:
Deduction to House Property Profits for NRIs
Pursuant to Section 80D Deduction
Section 80E deductions
Pursuant to Section 80 G deductions
Deduction pursuant to Section 80TTA
Unauthorized deductions for NRIs
RGESS investment (Section 80CCG)
Deduction under Section 80DDD for Differential-Deduction
Under Section 80DDBB, the differential deduction
Deduction under Section 80UU for Differential-Deduction
Sale of NRI Exemption for Land
How do you get taxed when you're...
Income tax filing for foreign nationals
a. Deduction to House Property Profits for NRIs
For a house purchased in India, NRIs can claim all deductions available to a resident from household property income. Deductions are also permitted with respect to the property tax charged and interest on the home loan. In more depth, you can learn about household income here.
b. Pursuant to Section 80D Deduction
NRIs are permitted to demand a deduction from a health insurance premium charged. This deduction is valid for senior citizens up to Rs 30,000 (increased to Rs 50,000 effective April 1, 2018) and for self-insurance, spousal and minor children up to Rs 25,000 in other cases. Furthermore, if their parents are senior citizens, and Rs25,000 if their parents are not senior citizens, the NRI can also demand insurance deductions for parents (father or mother or both) up to Rs30,000 (Rs50,000 effective 1 April 2018). From the beginning of fiscal year 2012-13, a deduction of up to Rs 5,000 for preventive health check-ups is also available.
c. Section 80E deductions
NRIs can claim a deduction from interest paid on an educational loan under this provision. The loan may have been made by the NRI, the spouse or children of the NRI, or the student for whom the NRI is the legal guardian, for higher education. The sum that can be reported as a deduction under this section is not limited. The deduction is valid for a maximum duration of 8 years or until interest, whichever is sooner, has been paid. For the principal repayment of the loan, the deduction is not available.
d. Pursuant to Section 80 G deductions
Under Section 80G, NRIs are entitled to demand a deduction for contributions from social causes. These are all qualifying donations under Section 80G.
e. Deduction pursuant to Section 80TTA
Non-resident Indians can, as resident Indians, deduct interest income from savings bank accounts up to a limit of Rs 10,000. This is permitted on deposits with a bank, a cooperative company or a post office in a savings account (not time deposits) and is available starting in 2012-13.
f. Unauthorized deductions for NRIs
Many of the Section 80C investments:
i. PPF investment is not permitted (NRIs are not permitted to open new PPF accounts but are permitted to retain PPF accounts opened while resident)
Uh, ii, ii. The NSC Investments
They're iii. The 5-year deposit programme by the Post Office
Oh, uh. iv. Savings Program among Senior Citizens
g. RGESS investment (Section 80CCG)
In the 2013-14 successful assessment year, deductions under Section 80CCG or the Rajiv Gandhi Equity Savings Scheme were implemented. The key aim behind this deduction was to maximise institutional investors' engagement in stock markets. If these requirements are met, the permitted deduction is less than 50 per cent of the amount invested in equity or Rs 25,000. NRIs do not have recourse to the deduction.
h. Deduction under Section 80DDD for Differential-Deduction
Deductions may be made under this Section for maintenance, including medical care of dependent persons with disabilities (persons with disabilities as described in this Section) who are not accessible to NRIs.
i. Under Section 80DDBB, the differential deduction
The deduction for medical care of dependents who are injured under this provision (as approved by a prescribed specialist) is applicable only to residents.
j. Deduction under Section 80UU for Differential-Deduction
Invalidity deduction shall be given only to resident Indians if the taxpayer has a disability as specified in the section.
k. Sale of NRI Exemption for Land
Oh, uh, NRI
Long-term capital gains are levied at 20% (when the property is owned for more than 3 years) . Note that a TDS of 20 percent is subject to long-term capital gains obtained by NRIs.
NRIs can seek exemptions pursuant to Section 54, Section 54 EC and Section 54F on long-term capital gains. Accordingly, the NRI can take advantage of capital gain exemptions at the time of filing a return and demand a refund of the TDS deducted from the capital gains. There is an exception under Section 54 for long-term capital gains on the selling of residential land. The exception provided for in Section 54F is made available for the selling of any asset other than household property. Read more here about Section 54.
The exemption under Section 54EC is also applicable when in fact, bonds are reinvested in capital gains from the sale of the first land.
i. If you are not interested in reinvesting your profit from the selling of your first property in another, you may invest it in bonds issued for up to Rs.50 lakhs by the National Highway Authority of India (NHAI) or the Rural Electrification Corporation (REC). It. ii. Hii. ii. In order to be able to assert this deduction, the homeowner has 6 months to invest the gains in those bonds, and you will have to invest before the tax filing deadline. Iii. And iii. After 3 years, the expended money can be recovered, but it can not be sold within 3 years of the date of sale. The term was raised from 3 years to 5 years with effect from the 2018-2019 FY. IV! IV. IV. The exemption pursuant to section 54EC was limited to the capital gain arising from the transfer of long-term capital assets as land and construction or both with effect from FY 2018-19. The exemption was previously valid for any capital assets that were being transferred. The NRI is obliged to make

Such investments and provide ample evidence to the buyer to secure no TDS deducted from the capital gains. The NRI may also record excess TDS deducted at the time of return filing, and request a refund.
l. Why are you charged while you are a...
i. Person resident on a foreign temporary assignment
Rahul served on a temporary assignment from Singapore for 4 months and received Singaporean dollars during that period. He attributed the income here in India to a bank account. He has gone home now. Why will he be in a position to file his tax return? Taxes for Rahul will depend on its residential status for this year. He would be treated as a citizen because Rahul hasn't been outside India for more than 182 days. He'll be expected to file his income tax in India this year. That will also include his salary received during the international assignment from Singapore. Rahul's residential status will change unless the assignment lasts longer than 182 days, and he will be required to pay tax only on the Indian income earned so far. Notice here that Rahul's foreign income credited in India to an Indian bank account is taxable.
It. ii. Hii. ii. Resident Person has recently moved abroad
Prashant is bound for a new career in the US. He gets his profits from the United States credited to an Indian NRE account. He continues his FD investments and has some cash in an Indian savings account put away. He had just been issued his Indian Employer Form 16. Will he be filing this year's returns in India? Every individual, NRI or not, must file a tax return if their income exceeds Rs 2,50,000. But note that NRIs are taxed in India only for income earned / received. Rahul must then pay income taxes earned while in India, and income accrued from FDs and savings accounts.
Prashant's income from India
Indian Employer's Rs 3,00,000 bonus
Interest profits of FDs Rs 25,000
Bank account interest savings of Rs 4,50000 Bank account interest savings
Complete gross sales of Rs 3,29,500
Returning
Section 80C-Investing in 20,000 Rs PPF Rs
Section 80TTA Rs 4,500 Waiver Rs
Taxable Revenue of Rs 3,05,000
10 per cent tax slab at Rs 5,500
Cessation at Rs 165 3%
TDS received from the Rs 4,000 employer
Withdrawn from Bank Rs 4,500 TDS Rs 4,500
Rs 28355 Rebate Tax
Iii. And iii. Living in a foreign country
It has been 3 years since Arjun moved to the U.S. In US dollars, he receives fees. He deposited his cash in a savings account and FDs in India. For Rs.35,000 a month, he bought an apartment and gave it up for rent. He donates a car to his parents and contributes Rs.10,000 to their account each month to assist with their year-round household expenses. He also transfers Rs 20,000 into his father's account to cover the expense of the insurance policy he has purchased from his parents.
Leasing 4,20,000 Rs
Less: a standard 30 per cent deduction in section 24 of Rs 1,26,000,000
Household earnings: Rs 2,94,000
Revenues from bank account FDs and Rs 30,000
Complete gross income of Rs 3,24,000
Deduction under Section 80D of Rs 20 000 000
Net Revenue of Rs 3,04,000
Arjun's donation to his father and the transfer of Rs 10,000 cash to his mother are tax-free. Rahul can claim a deduction under Rs 20,000 Section 80D with respect to the insurance expenses of his parents, as his father is over 65 years of age. As his gross revenue exceeds Rs 2,50,000, he will be required to file a tax return in India.
IV! IV. IV. NRI recently moved back to India.
The return of NRIs assumes RNOR (Resident, Non-Ordinary Resident) status where: a. In 9 of the 10 financial years preceding your return year, you were an NRI. You have stayed in India for 2 years or less in the last 7 financial years (729 days or less) The IT Department allows RNORs to continue to benefit from exemptions available to NRIs for a period of 2 years after their return. Deposits kept in foreign currency exempted from the NRIs shall therefore be exempted for a period of 2 years from the return of the NRIs. Returning NRIs are treated like people after those 2 years.
V. Global Income Living
Your global income in India is taxable if you are an Indian citizen. Outside India, such income may have been generated or received, but it is paid in India. If this income is also taxable in another country, you can take advantage of the DTAA (Double Tax Avoidance Agreement).
STUDIES TO CASE:
In 2010, after more than five years of living in London, Shreya returned to India. She has been retained by the French business she worked for as a consultant and is submitting payments in pounds. Her income there is credited to a bank account and Shreya pays tax on it in the United Kingdom. Does this income have to be taxed by Shreya, or does she include it in her Indian income tax return? Shreya is a native of India. Income taxability depends on residential status in India. On the global income that they receive, a resident must pay tax. The resident must report all the income he receives from all sources and from all countries in his income tax return and pay tax on it in India. (In India, the NRI only pays tax on income received or accrued). All Shreya's income will also be taxable in India, including the foreign currency fee that she earns. Their income in pounds shall be converted into Indian rupees for the purpose of calculating income tax and added to their overall income, which shall be taxed at the slab rates prescribed by the taxation department. In the United Kingdom, if Shreya has already paid international income tax, she can demand the gain under the DTAA. Shreya, on the basis of the related DTAA regulations between the two nations, will be spared from being taxed twice.
Remember to report it in your tax return if you are a citizen and have received some international income.
m. Income tax filing for foreign nationals
An expatriate Indian is one who comes to live in India but is not a resident of India.
Learn more about income tax returns by foreign nationals here
5. How can double taxation by NRIs be avoided?
By pursuing DTAA relief between the two countries, NRIs may prevent double taxation (meaning: being taxed twice in the country of residence and on the same income in India). Under DTAA, there are two mechanisms for seeking tax relief: the form of exemption and the tax credit method. NRIs are taxed only in one country and exempted in another in the form of an exemption. In the tax credit process, tax relief in the country of residence may be sought when the income is taxed in both countries.
6. Frequently asked questions
When do you see yourself as a non-resident Indian (NRI)?
A non-Indian resident (NRI) is considered a person who is not an Indian citizen. If your stay in India is 182 days or more or 60 days or more for a given financial year and 365 days or more in the four years immediately preceding the previous years, you are a resident. You would be considered an NRI if you do not satisfy any of the requirements above.
I'm an NRI retiree. I have rental income from an apartment that I own in India. I'm working in the United States, and I get pay revenue in the United States. In India, what revenue should I provide?
It would only be taxable on the salary you earn in India because you are an NRI. You're not going to be taxed on your worldwide wealth. The rental income from the flat located in India would also have to pay taxes in India. However, you will not be responsible for paying any taxes on the salary income from the US that you receive.
When does an NRI in India file its revenue return?
An NRI is required to file its revenue return in India, like any other individual taxpayer, if its gross total revenue received in India exceeds Rs 2.5 lakhs for any given financial year. In addition, the due date for filing a return to the NRI was also 31 July of the assessment year.
I'm a 65-year-old NRI. Do I have to file a return even if Rs 2.8 lakhs is my gross total income for a year from India?
The Rs 3 lakhs and Rs 5 lakhs basic exemption is only available to senior residents and superior residents. Therefore, as an NRI, even though you are a senior citizen, when your income in India exceeds Rs 2.5 lakhs, you will be responsible for filing your income return in India.
Upon payment to NRIs, can taxes be deducted?
Specified payments made to an NRI in the form of rent, professional or technical fees etc. enable the person making the payment to deduct tax at source. The person needs to acquire a TAN for himself in order to deduct taxes at source. In addition, Form 15CA (to be submitted by the person making the payment) and Form 15CB (to be obtained from a Chartered Accountant) are also required for making payments to non-residents. Read our detailed article on Type 15CA and 15CB for more explanation.
Is an NRI taxable on the revenue he receives in India, his country of residence? What position is played here by the Double Tax Avoidance Agreements (DTAA)?
An income-receiving NRI is taxable on such revenue in India i.e. As the source state, India has the right to tax such revenue. However the country of residence of that NRI would also be entitled to tax such income as the state of residence. In the process, the NRI would end up being twice taxed on the same income. India has entered into DTAAs with various countries to address this, helping to eliminate such double taxation by allowing taxpayers to claim credit for foreign taxes paid upon filing their returns on income in their home country.
I'm an NRI retiree. Will I be liable to capital gains tax if I sell a flat that I own in India?
Oh. Hey Hey! You will be responsible for the tax on capital gains in India upon the selling of your flat. In addition, on the amount of profits you make, the buyer himself has to subtract taxes. If the asset is a short-term asset, the long-term asset tax deduction cap would be 20 per cent, while slab limit taxes would be deducted at source.
Multi Brand Retail Sector FDI in India
Major guidelines from India's most recent FDI liberalisation policies in the multi-brand retail sector include the following:
In the multi-brand retail market, the minimum level of FDI

FDI in Multi Brand Retail Sector India

The significant recommendations of the latest FDI liberalization policies of India, in multi-brand retail sector, are the following:

The minimum level of FDI in multi-brand retail sector will be worth $ 100 million
Supermarkets are allowed in only those cities of India whose population is at least one million
At least 50% of the total investment will be made on the Back-end Infrastructure
And, at least 30% of their goods and products will be procured from the local companies and industries.