In line with IT rules and regulations, every Indian citizen is responsible to pay their returns on time if he/she may fall in the income tax slab.
It is clear that filing taxes strictly depends on the residential status i.e. the region he/she lives in. This is the same with the case of NRIs.
Residential status, in turn, is determined by the number of days you've spent in India in that financial year. Generally it counts in this way; when you are in India for at least 6 months (182 days to be exact) during the financial year.
NRIs have to pay income tax if their income goes above Rs. 2.5 lac and that income is solely generated in India via different sources.
NRI are Non-Residential Persons that may not live in India because of carrying business overseas but have inherent relations.
Read More: How to File an Income Tax Return for a Salaried Employee
Read More: How To Open Password Protected Income Tax Return PDF file
Steps For NRIs On How To File Income Tax In India
- Determine your residential status
It’s the very first step approach to file income tax. To e-file you need to be sure of your residence status i.e. whether or not you’re NRI. According to Income Tax Act 1961 u/s 6 determine the concern about residential status. It’s important for NRIs to reside in India for a number of days. An NRI needs to stay outside India for 182 days or more.
- Calculate your taxable income
When you are finally sure with ture residential status, the next step is to sum-up your taxable income. Simply, how much amount is taxable for NRIs?
The official authority of the IT department has stated various tax slabs for income tax calculation and filing. The foundation tax slab is Rs. 250000. If your income falls below this - you don’t need to file income tax. But if your income is above specified amount you are liable to pay tax with the parallel mentioned tax slab rate.
The NRIs income which is taxable could be ascertained from several sources.
“It could be in the form of your salary. It could be capital gains on the sale of shares and mutual funds. Interest from deposits in NRO accounts and rental income is also a part of the bracket.” - HDFC Bank
- Claim double taxation treaty benefit
Double Tax Avoidance Agreement (DTAA) enables an NRI to avoid paying tax twice on the same income. According to the DTAA law, an income may either be exempted from tax deduction in one country or taxed at a lower rate in the home country.
This helps NRIs when they already paid tax in India. With this, you can get tax credit in the country of residence.
- Verify IT returns
Well, in the end, you just move to the official e-filing portal and file your income tax after login using credential. Once you have filed IT returns, you need to verify them within 120 days. Thereupon, to make it valid.
Is Aadhaar Card Mandatory For NRI Income Tax Return?
It is the main pin-point question of every NRI tax payer. When filing ITR there you need to show an Aadhar card for ID verification, if you’re Indian citizen.
But, in case with NRIs, who’ve lived outside India for more than six months (182 days to be exact) in the last 12 months, don’t have to quote Aadhaar.
However, if you have an Aadhaar card, it’s good to mention it in your tax return and then e-file.
Read More: ITR Filing Guide: How To File Income Tax Return Online Step by Step
Read More: How to Check, E-Verify & Download ITR Status
