The
income earned by non-resident Indians abroad is not subject to tax in India. However, if their income in the
country crosses the basic exemption limit of Rs 2 lakh, they are required to
file their returns. This income could be in the form of interest on deposits,
rental income on property in India, etc.
Also,
if NRIs carry out transactions in securities like shares and mutual funds, the
capital gains are liable to tax and, hence, the return must be filed. The due
date for filing returns by NRIs is 31 July.
When to file
The
returns have to be filed if the income exceeds the taxable limit, or to claim
refund if the tax deducted at source is more than the tax payable, or to claim
the amount set off against capital losses.
Documents
The
documents to be submitted include the passport to show the number of days spent
outside India to qualify as an NRI. Besides this, the NRIs need to provide the
statements for the demat accounts, for the transactions and bank accounts held
in India, as well as the TDS certificates received from other parties.
Exemptions
The
NRIs can also claim exemptions available to individuals under the Income Tax
Act (unless specifically not applicable to NRIs), such as Section 80C, with
respect to certain investments, payment of principal on housing loan, etc. The
taxable income can be reduced by availing of these exemptions.
Filing alternatives
The
NRIs can file their tax returns online on the Income Tax Department e-filing
portal. Alternatively, they can use other private, paid e-filing portals to do
so, or even take the help of tax advisers.
Points to note
It
is not necessary for an NRI to file tax returns if the total income during the
relevant financial year consists only of investment income or long-term capital
gains, or both, and the tax has been deducted at source from such income.
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