ITR Filing as an OCI on Indian Income

All the Indians who are living in a foreign country and working there are worried mostly about the tax laws applicable to them in India. It is also applicable to those people who have an Overseas Citizenship of India. Also, it is necessary for individuals to file their ITRs on time to avoid any legal actions against them in the country. If you are an OCI, then you must know all the details about the taxation rules for OCIs in India. 

In this blog, we have discussed the steps to file an ITR for the OCIs on their Indian Income. We have also mentioned the income tax slab rates for them according to their income. You can also know the way to claim the relief from double taxation for OCIs and many other tax exemptions. 

Understanding Overseas Citizenship of India

The OCI is a status for immigration introduced by the government of India in 2005 under the Citizenship Amendment Act of 1955. It is a unique citizenship that is provided to some of the individuals of Indian origin. It was introduced by the government because the Indians who shift to foreign countries demand dual citizenship. 

The Person of Indian Origin (PIO) is a person who has migrated from Indian to a foreign country, except for Pakistan and Bangladesh. Under a specific category, they can apply for the OCI cards. The OCI cards are not similar to dual citizenship as they do not offer the political rights to their holders, and they also have a few limitations. 

Steps to File an ITR Online as an OCI

Nowadays, the Income tax return can only be filed online by using the Income tax portals for all taxpayers, including OCI cardholders. Here are the steps that you can follow to file an ITR: 

1. First of all, you need to register on the official portal of income tax filing and create your profile or login ID.
2. You can log in on the portal with sme important details such as mobile number, PAN card details, and email address.
3. Now, you need to make your Income tax return according to the provisions of the OCI cardholder.
4. After that, you need to submit this prepared ITR file on the Income Tax portal. 
5. After you upload the file, you can see a generated acknowledgement of ITR V.
6. You can verify the ITR V electronically on the portal, or you can also sign the hard copy of ITR V and send it to the processing certificate of income tax.
7. The income tax processing department will process your Income tax return and issue eligible refunds (if any).

Taxation Rules for OCI on Income in India

For all the OCIs, the foreign income and the interest earned on that income are exempted from taxation in India if deposited in an NRI account (rupee-denominated). Only the income that is earned from indian sources will be taxable in India for the OCIs/PIOs and non-resident Indians.

To know your residential status in India, you need to calculate the number of days you have stayed in India in a financial year. The residential status of the OCIs helps in determining whether they are eligible to pay tax in India or not in that particular financial year.

Also Want to Know About Completely Different Taxation Rules for OCI Cardholder Check Now!

Income Tax Exemptions for OCI

Here is the list of exemptions allowed by the Income Tax Department: 

• The funds deposited in an NRE (Non-Resident External) and FCNR (Foreign Currency Non-Resident) account by an OCI cardholder.
• The mutual fund schemes that as based on equity.
• The LTCG (Long-term capital gains) from the equity share transfer of a company.

Indian Income Tax Slabs for OCI

Here are the tax slabs for OCI in India:

• Cess: The cess charge is also applicable to the taxes calculated according to the table above. The cess rate is 4%.
• Surcharge: If the income of the OCI cardholder exceeds a certain threshold, then there will be additional surcharges added to them. The rate of surcharge is as follows: 

Double Taxation Relief for OCI

India has signed a Double Taxation Avoidance Agreement (DTAA) with many of several countries. It helps them in providing the tax relief to OCI cardholders from paying the taxes twice on the same income, once in their country of residence and their home country.

If the country of residence of an OCI has a DTAA with India, then the taxation will be applied on the OCI income under the Income Tax Act or the provisions of the DTAA, whichever is more beneficial for them. 

Why Choose Visament?

There are certain requirements for the OCI taxation in India, and you need to follow all the instructions and the right ITR to avoid any potential penalties. If you are not sure about the ITR forms and face confusion about how to fill the ITR, then you can seek expert guidance from the experts from Visament. They are very experienced, and they provide these services to hundreds of NRIs every week. 

You can get affordable prices at Visament for all the NRI services, including Tax filing. The experts are available 24/7 to provide customer assistance, and you can just complete the process from the comfort of your home. You can also get customized services for the NRI as per their requirements. So, contact Visamnet now and get your taxes done in one click.