Income Tax Return for TDS on Indian salary for NRI individual

POSTED BY Kunal ON July 24, 2012 10:00 am COMMENTS (4)

I am employed with an Indian company. For entire FY2012, I was working outside India so my residency status for FY2012 is NRI and hence I should be exempted from Indian Income Tax. However my company could not determine my correct residency status and by mistake paid income tax (TDS on salary) on my behalf even though I was not paid any salary in INR.

Now my Form-16 shows my gross earnings in INR and based on that the necessary taxes were paid and there are no returns. But now I need to file the returns for all the TDS on salary that was paid by my company. Can you please suggest how should I file my returns Online? I mean do I need to fill all the details on ITR-1 as per my Form-16, in which case the refund would get calculated as 0. Or shall I simply show the income against point “4-Gross Total Income” as 0 so that whatever was the TDS, would show as the refund? Also after online filling of ITR-1, in addition to ITR-V, do I need to provide any other documents to prove my residency status as NRI for FY2012?

4 replies on this article “Income Tax Return for TDS on Indian salary for NRI individual”

  1. Kunal says:

    Hi Manish, PK,
    Thank you for your reply. Yes, I am currently in USA working on H1 Visa.
    Let me explain you the situation a little in detail. I came to USA as an employee of Indian company in Jan-2011. Since then I worked for the same Idian company in USA till 16-Mar-2012 and then resigned. After that I am working for a US company and never went back to India.

    Now the salary that I received from the Indian company had two components India and US, both of which were paid in US $ in my US back account and not in INR. So after I left the Indian company, they sent me a balance summary report in which they indicated that my residency status for the FY 2011-2012 was Resident Indian and hence paid the taxes applicable to my Indian salary. The tax amount was INR 40K. In addition to this, I was eligible to receive the Gratuity from my Indian company which was INR 52K. So in the final balance report they paid me only INR 12K (52-40) and asked me to file IT returns to get back the remaining amount of INR 40K that they already paid as taxes on my behalf.

    In the form-16, it shows my Indian Salary as total gross earnings and then the necessary taxes that were deducted. Now when I fill the details same as that of Form-16 on ITR-1 then the ultimate tax returns would show as 0. In order to reflect that I should receive INR 40K as refund, I must show that my Gross Earnings in India was 0 and hence the taxes applicable were 0 on the first tab “Income Details” of ITR-1. Then on second tab “TDS” I can show that the taxes paid were INR 40K based on which the refund on third tab “Taxes paid and Verificaion” would show as INR 40K.

    Hope this clarifies the situation. So can you please suggest the approach that I mentioned to fill the details on ITR-1 is correct? Also after I file the returns online, along with the ITR-V receipt, do I need to provide any other documents to prove my residency status was NRI for the period Apr-2011 to Mar-2012?

    Le me know if you need any other information.

    Thanks,
    Kunal

    1. sachin4317 says:

      Hi Kunal,

      I am in exactly same situation, how did you filed your IT refund in India..

      Regards,
      Sachin Baderia

  2. PK says:

    @Kunal,

    You have mentioned that “you were not paid any salary in India” . In such a case how can your company deduct income tax(TDS on ur salary)?

    Assume that the TDS is 10%, then does it mean that if your salary is 8 lakhs per annum, ur company paid 80k? If you have not received that 8 lakhs, and still ur company paid 80k as TDS on behalf of u, then its not your head ache. Nothing has gone out of ur pocket.

    Not sure if I got your question correctly.

    Also, let us know which country u r residing in. Is it USA?
    If its USA, and if you are on H1 or L1 Visa, its mandatory that you receive salary in USA.

    Pls. clarify.

    Regards,
    PK

  3. Did you company say that you are not liable for tax ? As your income was paid in INDIA , then you are eligible to pay tax in India only .

    Can someone correct me on this ?

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