How NRIs Can File Their ITR in India:

Filing Income Tax Returns (ITR) in India as a Non-Resident Indian (NRI) might seem challenging, but with the right information and guidance, it can be a smooth process. This guide will help you understand everything about NRI ITR filing in India, including eligibility, required documents, filing methods, and key tips to save tax.

Who Needs to File an ITR in India as an NRI?

An NRI must file an Income Tax Return in India if:

Total income in India exceeds Rs. 2.5 or Rs. 3 Lakh, depends on your tax regime
Deposit ina saving bank account in India exceeds Rs. 50 lakh.
Deposit in a current account in India exceeds Rs. 1 crore.
Tax Deducted at Source (TDS)/Tax Collected at Source (TCS) of more than Rs. 25,000.
Incurred a travel-related expenditure from India of more than Rs. 2 lakh for yourself or anyone else travelling to a foreign country.

Steps for NRI ITR Filing in India

Follow these steps to file your ITR in India smoothly:

1. Determine Your Residential Status

Your residential status affects your tax liabilities and eligibility for various tax benefits. An individual’s residential status is determined based on the number of days they stay in India during the previous year and the preceding financial years. Generally, if you spend more than 182 days in India during a financial year, or if you have been in India for 60 days in the financial year and 365 days in the preceding four years, you are considered a resident for tax purposes. If you are not falling under these criteria then you will be consider as an NRI.

2. Determine taxable income with form 26AS and AIS & TIS

Form 26AS is a consolidated tax statement that provides details of tax deducted at source (TDS), advance tax payments, and other tax-related information. The department also started new facility called Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) which provide details of wide range transactions entered by you during the financial year. It is crucial for reconciling your income with online data. You need to determine your taxable income, which includes any income accrued or received in India. This can include following:

Capital Gains: Long term or short term gains from the sale of assets like stocks (Listed or unlisted), properties, mutual funds etc.
Interest Income: Interest earned on savings bank accounts, fixed deposits, or other investments in India.
Rental Income: Rental income from the properties located in India.
Income from Salary: If you are receiving a salary from an Indian employer for working as part time or have income from employment while working remotely for an Indian company.

3. Determine your tax liability

To ensure that you have accounted for all the taxes correctly, reconcile your income and taxed paid with online data available in form 26AS, AIS & TIS. Compare the details in the form with your records to ensure that all taxes have been correctly deducted and credited. Any discrepancies should be rectified before proceeding with your tax return filing.

4. Claim Double Taxation Treaty (DTT) Relief

India has signed Double Taxation Avoidance Agreements (DTTAs) with several countries to ensure that income is not taxed twice. If you are paying taxes in your home country on income that is also taxable in India, you might be able to seek relief under these agreements. To claim DTT relief, you must present evidence of taxes paid in another country and the provisions of the applicable tax treaty. This will enable you to avoid incurring taxes on the same income in both nations.

5. Register on the Income Tax e-Filing Portal

Before you can file your ITR online, you must create an account on the Income Tax Department’s e-filing portal. While registering yourself at IT portal you have to provide the details such as PAN Number, Mobile Number, Email ID, Bank Details etc.

6. Login to your e-Filing account and select appropriate ITR form.

Login to your e-Filing account at IT portal and navigate to Income Tax Return. Now you have to select assessment year for which you are filing your ITR. Further select the appropriate ITR form. This will depends on your income sources, choosing the correct Income Tax Return form for NRI is crucial for accurate filing.

6. Fill your ITR form online

The online ITR form will consists various schedule which includes basic details, business income, income from other sources, tax paid etc. Also disclose details of all bank accounts held in India. This includes both savings and current accounts, along with any foreign bank accounts if applicable.

7. Provide Assets and Liabilities Details AL Schedule

You are required to disclose details of your assets and liabilities in the ITR. This includes properties, investments, Loans or debts and other valuable assets held in India and abroad.

8. Submit your ITR form and e-verify

Carefully review all the filed schedules in your ITR form to ensure accuracy and submit the ITR form. After filling out the ITR form, the final step is to verify your return. This can be done by following

Aadhaar OTP (if linked to mobile)
Net Banking e-Verification
Sending a signed ITR-V to CPC Bangalore (if physical verification is required)

Tax Deductions & Benefits for NRIs

NRIs can save tax under these sections:

Section 80C: Investments in ELSS, PPF, NPS, and Life Insurance.
Section 80D: Health insurance premium.
Section 24(b): Interest on home loan deductions.
DTAA (Double Tax Avoidance Agreement): Prevents double taxation if tax is paid in another country.

Common Mistakes to Avoid in NRI ITR Filing

Using the wrong ITR form.
Not reporting Indian income sources properly.
Missing the tax verification process.
Incorrect bank details leading to delayed refunds.
Ignoring DTAA benefits.

FAQ’s on How NRIs Can File Their ITR in India

1. Can NRIs file ITR online from abroad?

Yes, NRIs can file their ITR online through the Income Tax Department’s e-Filing portal.

2. What happens if an NRI does not file an ITR in India?

Failure to file ITR may lead to penalties, interest on unpaid tax, and issues while repatriating funds.

3. Can an NRI file an ITR without an Aadhaar card?

Yes, Aadhaar is not mandatory for NRIs but having one can simplify verification.

4. How long does it take to get an NRI tax refund in India?

Tax refunds are generally processed within 3-6 months, depending on verification and assessment.

5. Can NRIs use their foreign income for tax deductions in India?

Only Indian-sourced income qualifies for deductions under Indian tax laws.

Conclusion (How NRIs Can File Their ITR in India)

Filing your ITR as an NRI in India doesn’t have to be complicated. With proper documentation, correct form selection, and timely filing, the process is seamless. Need assistance with NRI ITR filing? TaxUnplug is here to help!

Are you an NRI looking for tax filing in India? Contact TaxUnplug today!

How NRIs Can File Their ITR in India Without Any Hassle?