ITR Filing for NRIs

Many Indians spend a major part of their time abroad during the year. It is common knowledge that the Indian economy is based on the taxes that are collected from its residents. Those who generate money outside of their place of residence are subject to NRI taxation under the Indian money Tax Act, 1961. The income tax regulations and benefits that apply to them differ significantly from those that are applicable to Indian residents.

Who is a Non-Resident Indian?

According to the Income Tax Act, an individual who is not physically present in India to qualify as a resident for tax reasons is known as a Non-resident Indian (NRI). This is based on a person's stay in India over the course of the last four years (60 days or more in a year and 365 days or more total) or within a financial year (182 days or more makes him a resident). An exemption applies to Indian citizens and PIOs residing overseas, provided they remain in India for a minimum of 182 days annually.

Do NRIs have to file Income Tax Return in India?

Yes, for money generated in India, an NRI is required to file an income tax return in India. Taxes are due on income arising or accruing in India for nonresident individuals. Tax on income that is presumed to originate or accrue in India must also be paid by NRIs. In India, money that is received or presumed to be received is taxable. NRIs must abide by all tax laws in India, and getting help from tax professionals can make the process much easier.

Experts from Bizfoc can guarantee that NRIs comply with all applicable requirements and streamline the tax filing process. Professional advice can be quite helpful when it comes to comprehending your tax obligations, maximising deductions, or answering tax-related questions.

Documents Needed to File an NRI Tax

1. PAN Card : Must have PAN Card.
2. Passport : For nationality recognition, passport must be useful.
3. Form 16 : In case NRIs have experienced working in India, then the form 16 need to file and TDS deductions should be sent to NRI by their company.
4. Bank Account Information : The Indian bank account is credited with any tax return that may be received.
5. Investment declarations : Reports on share and mutual fund purchases done in India.

Steps to file ITR for NRIs

There are particular tax reporting obligations associated with being an NRI (Non-Resident Indian). Here is a detailed guide to assist you in navigating the procedure:

1. Step 1: Verify individual’s Residential Status: It is necessary to verify an individual’s residence status for tax filing for NRIs reason. One is eligible for an NRI, one should spend less than 182 days in a fiscal year.
2. Step 2: Reconcile Income & Taxes with Form 26AS: The Form 26AS is a significant document as it shows the TDS on various income. It helps to verify the information on Form 26AS is rightly mentioned by comparing it with real income of NRIs.
3. Step 3: Ascertain Taxable Income and Tax Liability: Check total taxable income in India, considering into account all sources such as rental income, capital gains and pays. Also helps to identify that certain income is eligible to tax exemptions.
4. Step 4: Claim Double Taxation Treaty Relief (DTAA): The DTAA between Indian and NRIs place of residency will allow NRIs to claim relief in case an individual has paid taxes in abroad income earned in India.
5. Step 5: Choose the Right ITR Form: The NRIs need to submit the forms ITR-2, ITR-3, and other relevant forms, depending on their sources of income.
6. Step 6: Collect Necessary Documents: Need to collect all required documents like bank account details, TDS certificates, capital gains statements, Form 26 (salaried income), and rent receipts.
7. Step 7: Online filing of ITR: After collecting all necessary documents will start with ITR filing, Bizfoc helps you to file your ITR easily without any complexity.
8. Step 8: Verify Your ITR Filing: An individual can verify the status of ITR filing in two manners such as Aadhaar, or electronically with digital signature verification. Physically by mailing the Income Tax Department a signed copy of the ITR-V form.

Benefits for NRI to file ITR

Even though they reside in foreign countries, Non-Resident Indians (NRIs) might profit from filing income tax returns (ITRs) in a number of ways.

1. Avoid default status: NRIs can prevent from the label as “defaulters” by tax authorities and protect their tax citizenship by constantly filing ITRs.
2. Evidence of Income: ITR is an official proof of income received in India and also required for various other purposes, such as proof of residency, acceptance of loans, and visa processes.
3. Using Tax Agreements: It is a huge advantage that can be considered by NRIs through the use of tax agreements between the home country and India. It helps to reduce withholding tax rates or exemptions, which lowers their entire tax burden.
4. Performing moral duties: By helping the authorities to raise funds for construction development and social services, filing an ITR demonstrates ethical citizenship and advances national enhancement.
5. Monetary Services Accessible: When providing services such as creating investments in Indian monetary tools, setting up bank accounts, or buying real estate in India, various monetary organizations require ITRs as evidence of earnings.

Time Limit and Penalties for NRI TAX

It is essential that you submit your tax return by the due date in order to prevent fines. The due date for non-resident individuals is usually July 31st of the assessment year, just like it is for citizens.

Interest costs and, in certain situations, criminal punishment are possible penalties for submitting tax returns beyond the deadline or not at all. As a result, meeting the due dates is crucial.

Why Bizfoc for ITR filing for NRIs?

Selecting Bizfoc offers a customised solution for Non-Resident Indians (NRIs) to file their Income Tax Returns. With expertise in NRI taxation and Indian tax legislation, they ensure precise submission, minimise mistakes, and provide personalised advice, ensuring regulatory compliance and tax benefits.

FAQs for ITR Filing for NRI