If you are a non-resident Indian (NRI), you may still be required to file an Income Tax Return (ITR) in India. The filing requirements will depend on your income sources and the duration of your stay in India. In this blog, we will discuss the key points that an NRI needs to keep in mind when filing an ITR.
Residential status:
The first step in determining your ITR filing requirements as an NRI is to determine your residential status in India. As per the Income Tax Act, an individual is considered a resident in India if they stay in India for 182 days or more in a financial year. However, for NRIs, the residency criteria may differ based on their passport status, income sources, and other factors.
Taxable income:
If you are an NRI and have taxable income in India, you will need to file an ITR in India. The taxable income for an NRI includes income earned or received in India such as salary, rental income, interest income, and capital gains.
Tax deduction at source (TDS):
If you have received income in India, such as interest or rental income, and TDS has been deducted from it, you will need to file an ITR to claim a refund of the excess TDS. You may also need to file an ITR to claim a refund of tax paid in excess of the tax liability.
Double taxation avoidance agreements (DTAAs):
If you are an NRI and have paid tax on your income in both India and another country, you may be eligible for relief under DTAAs. DTAAs are agreements between India and other countries that help to avoid double taxation of the same income. You may need to file an ITR to claim relief under DTAAs.
Form selection:
NRIs can file ITR using the same forms as residents of India. However, the selection of the appropriate form will depend on the type and amount of income earned by the NRI in India. For instance, if the NRI has only salary income in India, they can file ITR-1 or ITR-2. If the NRI has capital gains or business income, they may need to file ITR-3 or ITR-4.
In conclusion, NRIs may need to file an ITR in India if they have taxable income or if TDS has been deducted from their income. The selection of the appropriate form will depend on the type and amount of income earned by the NRI in India. It is advisable to consult a tax expert to understand the specific ITR filing requirements as an NRI.
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