If you are a Non-Resident Indian living abroad, you are not free from paying taxes in India. NRIs who continue accruing income from India or receive or deem to receive income in India are liable to file their Income Tax Returns on the IT Department's official portal. NRI taxpayers must note that income earned outside India is exempt from taxation here; therefore, it is liable to be taxed in the country where it is earned. Looking for the ITR Filing services for NRI taxation, reaching out to professionals who can provide expert guidance will be a prudent decision. TaxDunia has a team of experts offering real-time updates and comprehensive support for meeting legal compliance.
How Can NRIs File Their ITRs?
Step 1
NRIs need to determine their residential status in each financial year before filing the returns. If an individual meets the following conditions or eligibility criteria, then they are Indian residents; if they do not meet the following conditions, then they are NRIs
- Residing in India for 182 days or more during the previous year
- Resided in India for 60 or more days in the previous year and 365 days or more during the 4 years immediately preceding the previous year
Step 2
Now comes the reconciliation of income and taxes with Form 26AS. Reconcile and compare the TDS offset paid on your ITR or input tax paid on your tax return against the TDS
Step 3
You have to pay taxes on the total taxable income; therefore, determining it is the most important step. Calculate total income earned from India, like capital gains from shares held in India, rental income, interest, and all. To legally reduce the overall tax liability, you can use deductions and income exemptions available under various sections of the income tax for NRIs.
Step 4
To further benefit the taxpayers, countries have signed Double Taxation Avoidance Agreement (DTAA), which enables you to pay taxes either in your native country or the country where you are currently residing. India has signed DTAA with more than 90 countries in the world. In case you are residing in one of those 90 countries. You will not be taxed twice on the same income.
Step 5
Under the Income Tax Act, there are seven ITR forms ranging from ITR 1 to ITR 7. NRIs have to file ITR 2 if they derive income from all sources other than business income. You have to file ITR 3 in case of business income.
Step 6
Provide foreign bank account details if you do not have a bank account in India. In case your total income is above Rs 50 lakhs, furnish details on movable and immovable assets located in India and tax liability details.
E-verify the ITR after successful completion. Downloading the ITR 2/3 form from the portal and filing the liabilities and assets details correctly requires precision and attention to detail. Tax experts have exposure in handling the taxes, therefore, delegating the filing responsibilities to them is going to save a lot of time and resources for you.
Documents Required for NRI Tax Return Filing
Non-residents can avail of the benefits of DTAA, which allows them to file taxes in the country of residency but not in India. Still, they can use refunds and exemptions in India when filing the returns
- When filing the returns to avail of DTAA benefits, provide the Tax Residency Certificate (TRC)
- Also, file Form 10F to get refunds and exemptions
If NRIs do not have any source of Income in India, they are not mandated to file returns here can still claim refunds and exemptions by filing form 10F and showing TRC.
In case NRIs having Indian income, the documents required for filing the returns are
- PAN
- Aadhaar
- Passport
- Bank statements
- Income proofs
- TDS/TCS certificates
- Investment proofs
- Interest certificates
- And other documents required for residents based on the source of income
Filing the returns comes with a lot of benefits. For example, you can meet the compliance and set a clear record with authorities, apart from that, you can also claim refunds and exemptions under DTAA. If you are a nonresident and looking to make investments in India, reach out to TaxDunia and let the professionals design a customized plan for you. You can stay abroad but still can make investments in your home country.
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