FAQs on NRI Income Tax Returns in India
1. Who qualifies as an NRI for tax purposes?
If a person meets the criteria for “resident but not ordinarily resident” (RNOR) or “non-resident” status under the Income Tax Act of India, that person is regarded as an NRI for income tax purposes. In general, a person is deemed to be an NRI if they spend less than 182 days in India during a fiscal year, less than 60 days in India during a fiscal year, and less than 365 days in India for the four fiscal years prior to that fiscal year.
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2. What types of income are taxable for NRIs in India?
NRIs are generally liable to pay tax in India on income earned or received in India, such as salary, rent, capital gains, interest, etc. However, certain types of income, such as income from agriculture or specified investments like tax-free bonds, may be exempt from tax for NRIs.
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3. Do NRIs need to file income tax returns in India?
Additionally, if an NRI’s total income, including money generated or received in India, exceeds the basic exemption limit—currently set at Rs. 2.5 lakh for those under 60, Rs. 3 lakhs for those between 60 and 80 (senior citizens), and Rs. 5 lakhs for those over 80—they must file income tax returns in India (super senior citizens).
4. Can NRIs file income tax returns electronically?
NRIs can file income tax returns electronically through the online portal of the Income Tax Department of India, just like resident Indians. Similarly, the process for e-filing is the same for NRIs as for resident Indians.
5. Can NRIs claim deductions and exemptions while filing income tax returns in India?
Yes, NRIs can claim deductions and exemptions on eligible investments and expenses, just like resident Indians. For example, NRIs can claim deductions for investments made under Section 80C, 80D, etc., and exemptions for House Rent Allowance (HRA) or Leave Travel Allowance (LTA), subject to certain conditions.
6. What are the due dates for filing income tax returns for NRIs?
The same as resident Indians, NRIs must file their income tax returns by the same deadline, which is typically July 31st of the assessment year for those who do not need to have their accounts audited. However, the deadline could change based on a number of variables, so it’s best to check the Income Tax Department’s website for the most recent information.
7. Is it mandatory for NRIs to have an Aadhaar card for filing income tax returns in India?
Having an Aadhaar card is not mandatory for NRIs to file income tax returns in India. NRIs can voluntarily obtain an Aadhaar card and use it for various purposes, including filing income tax returns, if they wish to do so.