Enquire Now
Apr 2018

Income tax rules for NRIs

Income tax rules for NRIs

If the Indian citizen leaves India for a job abroad or as the crew on the Indian ship and spends less than 182 days in India in one year, she or he is said to be the non-resident for the tax purposes.
The taxability in India depends on whether an individual qualifies for the non-resident Indian status for the year.
Here are some of the income tax rules for the non-resident Indians should know-
A non-resident Indian has to pay the tax on any income that arises or accrues in India or is received in the country. Thus, salary received in India, interest rates fro, fixed deposits, rental incomes or saving bank accounts and the capital gains on assets that are sold in India are taxable. If the income of the non-resident Indian is more than the basic limit of exemption for the year, she or he is liable to file the return in India. Also, do claim that the tax refunds or to carry forward losses to the future years, non-resident Indian have to actually file a return.
If any non-resident Indian returns permanently to India after spending some years abroad, her/his foreign income doesn’t become taxable in India immediately. Any individual who has been non-resident for 9 years consecutive years, remains resident but not ordinarily resident (RNOR) for 2 years for tax purposes which is transitional status between being non-resident Indian and becoming full-fledged resident in India. Till the point of time returning the non-resident Indian becomes the resident in India as per the tax laws which generally takes about 2 years- any income earned outside the country won’t be taxed in India unless it is from profession or business controlled from India. Once, he/she is a resident, global income which basically includes the income outside India as well.
The budget announced that TDS won’t be deducted at the higher rate if the non-resident India without PAN can give alternative documents. Previously, the non-resident Indian had to pay tax at the rate of 20% or rate in force whichever is the higher in case of the non-resident Indian does not furnish PAN. According to the new provision, non-resident Indian does not have to pay the higher tax if he does not furnish PAN ad instead give documents specified under the present notified rules in this specific regard.
If the non-resident Indian as well as turns ordinary resident Indian for a specific year, then the person will have to disclose all foreign assets as well as foreign income on the tax return. There are penalties under Undisclosed Foreign Income and Assets Bill, 2015 for not doing. Such income will thus not be taxed under Income Tax Act but under provisions of new legislation on the unaccounted money.
A non-resident Indian cannot open the public provident fund account. But, if the person has PPF account before becoming a non-resident Indian, she or he can continue to operate the account but till the period of maturity. At maturity, the non-resident Indian would have the option to remit proceeds in proceeds in the country of residence as well as won’t have the option of extension post the mandatory 15 years’ lock period. In the case of post maturity, the account is left unattended, it certainly will be considered as the extended without contribution.


There is 0 comment on "Income tax rules for NRIs".

submit a comment

related posts