Non- Resident of India (NRI)?
Non-Resident” is a person who is not Resident in India. The residential status of an individual in a given year determines whether the individual is Resident or Non-Resident for that given year. Thus, the residential status of an individual needs to be determined every year. For more details, read.
Determine Your Tax Residency Status
The first step in filing your income tax returns as a non-resident individual is determining your tax residency status.
As per the Income Tax Act of 1961, there are three main categories:
- Resident: If you have stayed in India for at least 182 days or more during the financial year, you are considered a resident for tax purposes.
- Non-Resident (NRI): If your stay in India is less than 182 days during the financial year, you are categorized as an NRI.
- Resident but Not Ordinarily Resident (RNOR): An individual who is not a resident in the last nine out of ten financial years and has stayed in India for less than 729 days in the past seven financial years falls under this category.
Documents Required for NRI Tax Filing?
- PAN Card: Mandatory for filing taxes.
- Passport: For identity and nationality verification.
- Salary Slips & Form 16: Details of salary income.
- Bank Account Details: Indian account for tax refunds.
- Investment Details: Declare Indian investments.
- Tax Payment Receipts: Proof of tax payments.
- Foreign Assets Info: Details of foreign accounts/investments.
- Rent Receipts: If earning rental income.
- Indian Property Details: Information on owned property in India.
- Additional documents may be needed based on specific circumstances, like TDS certificates or agricultural income details.
NRI’s have to pay taxes in India?
The answer is YES. After you have determined your residential status, the next step is to identify whether your income is taxable or not in India as per your residential status determined under Income Tax Act,1961.
For Resident Individuals: Your Global income is taxable in India i.e. income earned whether in India or outside India is taxable in India.
For Non-Resident Indians: Only income earned or accrued in India or deemed to be so is taxable in India. Therefore, your income from any country besides India is not taxable in India.
Deductions which are allowed and not allowed to NRI?
Deductions Allowed | Deductions Not Allowed |
Sec 80C • LIC premium • Tuition Fees • Principal repayment of home loans • Unit Linked Insurance Plan (ULIP) • Equity Linked Tax Saving Scheme (ELSS) | Sec 80C • Investment in Public Provident fund (PPF) (Not allowed opening a new PPF account. However, PPF account opened while you are a resident is allowed to be maintained.) • Investment in National Saving Certificate (NSC) •Post Office 5-year Deposit scheme •Senior citizen savings scheme |
Sec 80D- Medical Insurance | Sec 80CCG- Investment in Rajiv Gandhi Equity Saving Scheme (RGESS) |
Sec 80E- Interest paid on Education loan | Sec 80DD- Deduction for maintenance including medical treatment of dependent |
Sec 80G- Payments made in the form of eligible Donations | Sec 80DDB- Deduction for medical treatment of dependent handicapped (as certified |
Sec 80TTA- Interest on Savings Bank Account | Sec 80DDB- Deduction allowed to a taxpayer who himself suffers from disability |