Who is an NRI?

An Indian staying abroad is known as an NRI i.e. Non-Resident Indian.

Who is a person resident in India?

An individual is considered to be a tax resident of India (also referred to as Indian tax resident) for a financial year (say FY 2016-17) if (i) he has been in India for 182 days or more during that FY, or (ii) he has been in India for 60 days or more during that particular FY and has lived in India for at least 365 days or more during the four years immediately preceding.

What is the time limit to file the Return of Income?

A3. Every person who is not carrying on business is required to submit return of income by 31st July every year for the income earned during the prior year ending 31st March provided his income exceeds the maximum amount not chargeable to tax i.e. INR. 2, 00,000/-.

What is the Last Date for NRIs to file their Income Tax Return in India?

The last date for NRIs to file their Income Tax return in India is July 31st

FAQs on NRI Taxation Rules & Regulations

Does the Income Tax Law require NRIs to Pay Advance Tax?

NRIs are only required to do say if in a financial year their tax liability exceeds INR 10,000. Interest charges as laid down in Section 234B and Section 234C will come into play in an event of failure to pay your advance tax.

What is Tax Exemption Certificate?

The Income Tax Act has provided a procedure where an NRI can apply to the assessing officer to issue a tax exemption certificate authorizing the payer of income to deduct tax at a lower or nil rates.

Who can apply for tax exemption certificate?

Any NRI who receives an income after tax being deducted at source can apply to obtain tax exemption certificate provided his income is less than INR 1, 50,000/- p.a. in India.

Taxable Income for an NRI

Income that you receive or for that matter someone else receives on your behalf as salary in India is taxable. Therefore, if you are an NRI and your salary is directly transferred to an Indian account, you will be required to pay taxes as per the existing Indian tax laws. This income is taxed at the slab rate you belong to.

Deductions and Exemptions for NRIs

Similar to resident citizens of India, NRIs too are eligible to claim several of the deductions listed under income tax rules and section 80C.

Deductions under Section 80C

Akin to resident citizens of India, NRIs too are eligible to claim several of the deductions listed under section 80C of the income tax rules. They are enumerated as following:

  • Payment of premium on life insurance:
  • Fee paid for children’s tuition:
  • Loan taken for buying a house property:
  • Investments in Equity Linked Saving Scheme (ELSS)

Other Allowable Deductions

In addition to deduction allowed under Section 80C, an NRI is also qualified to demand rebate under different other existing Income tax laws which are discussed as following:

  • Deduction from House Property Income for NRIs
  • Deduction under Section 80D
  • Deduction under Section 80E
  • Deduction under Section 80G