NRI alert: 4 days to file your tax returns
As a Non-Resident Indian (NRI), you don’t have to pay taxes in India, right? Think again.
For resident Indians, while there are a handful of permutations and combinations to arrive at whether or not you must file tax returns, as an NRI, it is simple to know if you must.
For resident Indians, all income earned above the exempted limit of Rs250,000 – anywhere in the world – is taxable. However, there are exemptions based on age, etc.
Contrary to popular belief that Indian expats don’t have to file tax returns in India, if an NRI’s income in the home country is more than Dh1,150 per month (Rs20,833), s/he need to file tax returns.
Which means that if you have a property in India from which you are receiving a monthly rent of, say, Rs15,000, and have fixed deposits in Indian banks that return Rs5,000 per month, and earn dividends from shares of Rs834 or more, then you are entitled to file tax returns as your total annual income in India becomes more than Rs250,000.
Remember, however, that interest on NRE and FCNR account is tax-free while interest on NRO account is fully taxable.
Also remember that filing tax returns if you fall in that bracket, isn’t a choice – it’s mandatory.
So if you’ve calculated that you need to file tax returns, you must note that, unlike every year when the last day to file tax returns is July 31, this year the deadline for filing tax returns has been extended by a month, to August 31, 2015.
Which means that, as of today (Tuesday), you have seven days to file your tax returns.
Filing the tax returns is a chore, but it will be good for you financially.
For, as NRIs, your income is taxed at the highest rate of 30 per cent, and you stand to gain some of that back by claiming a refund by filing the returns.
It is also beneficial for those who wish to carry forward losses or offset gains.
Remember that you need not be in India to file tax returns – you may file your tax returns online on the Income Tax Department e-filing portal, post your documents to the IT department, or file through one of the numerous tax agents (who will charge you a fee for their services).
Tips for NRIs to file tax returns:
• When to file: The extended deadline for filing tax returns this year is August 31, 2015.
• Exemptions: NRIs can claim the same exemptions available to resident Indians Income Tax Act (barring those specifically not applicable to NRIs), such as Section 80C, with respect to investments, principal on mortgage, etc.
• TDS: If your total Indian income during the financial year is derived from investment income and/or long-term capital gains, and the tax has been deducted at source from such income, then it is not mandatory for you to file returns.
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