Income Tax Return Filing Services for NRIs

Benefits of India Tax Filing for NRIs

There are many benefits for the NRIs if they timely fill the ITR:

• It helps in maintaining consistency in Tax Records.
• You can claim the Foreign Tax Credit (FTC).
• There are also TDS/Tax Refunds to claim.
• You can build your creditworthiness by filing the ITR.
• The Visa application and renewal process will be easier for you.

How to File ITR as an NRI: Complete Process

You can take expert help from Visament to fill out the Income Tax Return in India for NRIs. You can fill out an application form with the assistance of professionals and upload all the documents to our specialized dashboard. Our experts will make sure that you claim all the deductions or exemptions while filing the ITR for maximum savings. 

There are certain requirements for filing ITR in India for NRIs. Here is the whole step-by-step guide for the whole process:

Step 1: Determine your Residential Status first

For tax purposes, you have to first confirm your residential status. If you spend less than 182 days in India during a particular financial year, then you are considered an NRI. 

Step 2: Fill out Form 26AS to reconcile income and taxes

Form 26AS is a very important document that is used to show the TDS on the different income sources. You should reconcile the information written on Form 26AS with your actual income to make sure that everything is correct.

Step 3: Evaluate Taxable Income and Tax Liability

Now you have to calculate all your income, which is taxable and comes from different sources such as rental income, salary, capital gains, etc. Keep in mind that some income can be exempt under the specific categories and tax treaties. 

Step 4: Claim benefits from Double Taxation Treaty Relief (DTAA)

In case you have paid the taxes in a foreign country on the income earned in India, then you can claim the benefits under the Double Taxation Avoidance Agreement (DTAA) between both the countries, India and the country of residence. 

Step 5: Choose the correct ITR form 

The NRIs are not allowed to fill out the Form ITR-1 anymore. You can fill out ITR-2, ITR-3, or any other applicable form depending on the source of your income. 

Step 6: Collect all the necessary documents

You need to gather all the required documents, such as Form 16 (for salary income), capital gains statements, rent receipts, TDS certificates, and bank account details. 

Step 7: File your Income Tax Return Online

To fill out the ITR online, you need to visit the official website of the Income Tax Department. Choose the correct ITR form, fill it with the correct information, and submit it along with all the necessary documents. 

Step 8: Verify your filled ITR within the 30 days of India Tax filing

There are two ways by which you can verify your ITR:

• You can verify it electronically by using the Aadhaar card or digitally signed verification.
• You can also verify it physically by sending a self-attested copy of the Form ITR-V to the ITD.

NOTE:

1. Exempt Income: don't forget to declare the exempt income in the ITR, such as dividends on shares, interest on NRE accounts, etc. 
2. Details of Bank Account: You have to provide the details of your foreign bank account while claiming a tax refund. 

Tax Exemptions & Deductions for NRIs

The NRIs are allowed to claim certain tax deductions and exemptions, the same as the residents. It will help in reducing the tax burden significantly. 

NOTE: It is important to know that the maximum deduction of up to Rs 1.5 lakh is allowed under Section 80C. You can only claim all these exemptions and deductions if you file the taxes as per the old tax regime.

Know the Income Tax Rules for NRIs

The taxation process for the NRIs can be a bit complex and difficult, especially when you are dealing with assets and financial transactions across borders. Here are the rules or tax implications for different situations:

Remittances

• Tax-free: Remittances for personal use are tax-free if they are within the Liberalised Remittance Scheme (LRS) limit of USD 250,000 per year. 
• Income Tax: If the remittances are from salary, income from business, or some other taxable sources in India, then it is subject to taxation. The income tax will be based on the income slab and the residency status of NRIs.
• TCS (Tax Collected at Source): If the remittances exceed Rs 7 lakhs per year, then TCS will be imposed at a rate of 5%. You can claim this as a credit against the future tax liability.

Gifts

• Gifts from NRIs to Resident Indians (RIs): It is taxable for the receiver only if the amount is more than Rs 50,000. It is added to the total taxable income.
• Gifts from RIs to NRIs: It is tax-free only if the amount is less than Rs 2 lakhs; otherwise, penalties are applied.
• Gifts from NRIs to NRIs: These are typically tax-free, unless they originate from illegal sources or the amount is more than USD 250,000 per year (it is the LRS limit). 

Inheritances

• Inheritance from Movable assets: There is no inheritance tax on these assets, such as bank deposits, shares, etc., in India.
• Inheritance from Immovable assets: There is no inheritance tax on these assets, like property, but there will be capital gains tax imposed on them after selling. It is also subject to indexation benefits.
• Remittance of inheritance proceeds: Under LRS, it is restricted to 1 million USD per financial year. 

Foreign Assets

• Income from foreign assets: It is taxable if the amount exceeds the basic exemption limit, which is Rs 2.5 lakhs for NRIs. It is not exempted under the provisions of DTAA.
• Capital gains from foreign assets: If they are accrued after becoming an NRI, then they are usually taxable, unless they are exempt under the provisions of DTAA. 
• Reporting requirements: It is mandatory for NRIs to mention the details of their foreign assets while filing the Indian Income Tax Returns. 

Documents Required for NRI Taxation

You should keep all the required documents handy while filing the Indian ITR. Here is the checklist for the documents:

• Passport: It determines the status of their citizenship.
• PAN Card: It is important for the tax filing process.
• Form 16: It includes the details of income and TDS deductions as per Indian Employment.
• Bank Statements: It is used to track the interest income for the given financial year.
• Bank Account Details: It is needed because the tax refunds are credited to the given indian bank account. 
• Rent Receipts: These are important for the rented Indian properties.
• Property Documents: If you own any property in India, then ownership documents are required.
• Investment Statements: It includes the records of all the indian investments you have made, such as stocks or mutual funds.
• Tax Paid Details: It is the proof of taxes that you paid for the financial year.
• Foreign Income Details: It includes the documents of the income that you earned outside India. 
• Insurance Policy Details: You have to provide the proof of any life or health insurance policy documents. 
• Other Details: It includes all the other important requirements, such as TDS certificates or agricultural income. 

Also, we will advise you to keep the documents handy that show the number of days you stayed in India in the previous year and the last 5 years, as it can be useful for proving your NRI status. 

What are the Taxable Income for NRIs

As an NRI, if you earn some income in India, then it is eligible for taxation. There are different types of income, which are categorized as taxable or non-taxable in India:

Due Dates and Penalties for Late Filing

The due dates for filing the ITR for NRIs and the penalties imposed after the late filing or non-filing for returns are given below:

Due Date

• The due date for the Indian ITR is July 31 of the assessment year.
• For certain business entities, this due date is Sept 30 of the assessment year.
• For NRIs also, the due date is generally July 31 of the AY.

Penalties

• You have to pay penalty fees for the late filing of the ITR.
• Your ITR will be processed late.
• You will lose the ability to claim the TDS refund.
• Your losses and lapses will be carried forward.
• You will receive notices from the IT department.