Taxation for NRI

POSTED BY Kailas Pethkar ON October 6, 2010 11:31 am COMMENTS (7)

CAN ANYONE POST COMPLETE DETAILS OF NRI TAXATION?
1. IF NRI has only income fom house property less than 1.5 lac, is he liable to pay tax and file returns? Whats the rule for residents in this case.
2. IF NRI has only interest income (in NRO account) less than 1.5 lac, is he liable to pay tax and file returns? Whats the rule for residents in this case.

7 replies on this article “Taxation for NRI”

  1. sidrana7 says:

    Kailas,

    I reckon you better have it personally clarified when you go next time. Even if you dont file returns every year thta should be fine. You can do cumulative at one time.

    IT dept may have good communication customer service. In fact for my wife’s PAN card the govt subsidiary customer service was brilliant. If you ahve your PAN card with you you can find out which IT office it is registered at and communicate with them directly.

    Last time I was in Kolhapur one CA asked about Rs750/- per year for filing returns. I didnt seem to have time nor documents so let go.

  2. Kailas Pethkar says:

    Since I m working and living abroad, its difficult for me to go to I-T office personally and file returns. Hence I give all documents to CA and he files it on behalf of me.
    I have filed returns for last 2 years and had claimed for refunds. However till date there is no intimation from I-T dept regarding the same.
    I would like to know if there is some reliable person with sufficient knowledge and updates, so that I can hand over the documents to him for filing returns next time around. I would prefer someone in Mumbai/Pune/Sangli area in Maharashtra where I have my base locations.

  3. sidrana7 says:

    I believe your very first question asks for the whole package! Anyways.

    whatever the capital gain it will be TDS’ed, this will be done through PINS account. But applied to derivatives traded through Non-PINS folio or the income from existing shares before turning a non-resident for the tax purposes.

    I do not believe you get no refund for the TDS paid at bank(unless you crossed the taxable threshold). There is no such thing of no tax refunds. All the accumulated tax (be it from resident income or capital gains on the investment in india from remittance) should be held against your PAN and further serviced.

    All Income is The Income for the Tax Authorities, off course it will be from different instruments and will have different treatment on the taxation rates on those different instruments. But at the end ALL will be totalled to derive individual’s tax assessment.

    regards
    Siddharth.

    1. Kailas Pethkar says:

      1. Last financial year, I had STCG OF 49K from shares for which TDS was deducted by HDFC. However since PAN was not registered with bank NRE a/c (but it was registered with PINS A/c), it is not reflected in form 26AS. And I didnt have TDS certificates from bank. When I furnished all documents to CA, he toldme that I have to pay tax for the STCG. There was no other income attributable as Indian income.
      So if you are saying all income is to be clubbed and if its less that 1.6 lacs, why CA asked for tax amount to be paid?
      2. I feel that same query may be raised in case of Income from House property and NRO savings account interest when I own a house and rent it out or open an NRO savings account.
      Hope you can advise on the same suitably.

      1. sidrana7 says:

        Kailas,

        I am not sure in your case, but is there any catagory of tax which is non-reclaimable if the nett taxable income is below the threshold? I see some misunderstandings here.

        once again I am no expert but CA may not necessarily be right! Have you taken second professional opinion?

        Or is that the bank goofed up here?

        Again whether it is STCG or LTCG it can be reclaimed as per the guidlines. Yes the tax has to be paid first and then the return to be filed.

        Why not file the tax return and see what the IT dept has to say? have you got the “NO” from IT dept in writing? or it was just CA?
        If I were you I would take CA’s word with pinch of salt and go to authorities and clarify,

        cheers
        Siddharth.

  4. sidrana7 says:

    Kailas,

    By now there is plenty good stuff on nri and taxation online. Try googling. There are some official guidelines for nri and investment/taxation online.

    All of the resident taxation rules apply to nri income from India. So anything below the resident threshold (1.5L?) is tax exempt which is generated from india itself.

    Keep in mind that NRO deposits/FD’s get taxed by TDS and you may have to file return for the same.

    1. Kailas Pethkar says:

      I think there are exceptions to this.
      If NRI has short-term capital gains, irrespective of his indian income, its taxed at source and cant claim refund for the same.
      Hence I had specific questions with regard to whether all income (interest, house property) is combined together to arrive at taxable income(1.6 lacs present slab) or otherwise.

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