An NRI's income taxes in India will depend upon his residential status for the year as per the income tax rules mentioned above. If your status is resident your global income is taxable in India. If your status is 'NRI,' your income earned or accrued in India is taxable in India.
NRI Incomes liable to tax in India:
Capital gains income: Capital assets like house
property, shares and securities, gold etc. which are of Indian origin, shall be
taxable in India. If an NRI transfers any capital asset situated in India, he
shall be liable to pay capital gain tax. He may subject to different tax rate based on different
class of assets.
Salary Income: Income from salary received in India or income for
services rendered in India shall be subject to Indian tax laws.
House property income: Rental income from the
house located in India is taxable for an NRI owner of the house property. The
determination of the taxable house property income shall be in similar lines as
the resident.
Income from Other Sources: Other sources income like
interest received in saving account and fixed deposits held in Indian banks
shall be taxable in the hands of NRI. Interest on NRE and FCNR account is not
liable for tax in India.
Income from business & profession: Any income earned by a
Non-resident Indian from a business set up or controlled in India will be
considered income accrued and therefore taxable in India.
Double taxation relief (DTAA)
In case
NRI income is taxed in both the countries, India and the country of residence,
tax relief from a DTAA (Double Tax Avoidance Agreement) between the two
countries can be sought.
How to determine NRI status?
Till the end of FY 2019-20 (i.e. financial year
ended March 31, 2020), NRIs (covers Indian citizens and Persons of Indian
Origin) included those individuals who being outside India visited India for
less than 182 days in a financial year.
The Finance Act 2020 reduced this period to 120
days in cases where the total taxable Indian income (i.e., income accruing in
India) of such visiting individuals during the financial year is more than Rs
15 lakhs. Accordingly, visiting NRIs whose total income whose total income
(which is defined as taxable income) in India is up to Rs 15 lakhs during the
financial year will continue to remain NRIs if the stay does not exceed 181
days, as was the case earlier.
If NRIs have taxable income in India than it is
mandatory to file within in the due date. NRI Income tax return must be
filed on or before 31st July following the financial year by an
individual.
The due date is considered as September 30 if the
NRI is a working partner of a firm whose accounts are necessary to be audited.
However, if the taxpayer has missed the due date, the taxpayer can file a
belated return.
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