{"id":207,"date":"2019-01-29T06:46:14","date_gmt":"2019-01-29T06:46:14","guid":{"rendered":"http:\/\/corpbiz.io\/learning\/?p=207"},"modified":"2021-03-09T12:19:49","modified_gmt":"2021-03-09T06:49:49","slug":"do-you-know-about-income-tax-for-nri-in-india-10-minutes-read","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/","title":{"rendered":"Do You Know About Income Tax for NRI in India: 10 Minutes Read"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Indian economy moves with the help of tax. The tax collected from the citizen is used to build roads, hospitals, school and to provide other amenities to the general public. It is the core foundation of the Indian economy eventually. The tax collected from resident or non- resident it doesn\u2019t make any difference to its end-use. Today, in this article we will throw some light on the Income-tax for NRI. To know about Income tax for NRI first we need to check the residential status of the person whether it comes in resident or non- resident.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#How_to_Check_the_Residential_Status\" >How to Check the Residential Status?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#What_Incomes_are_Included_in_the_NRIs_Income\" >What Incomes are Included in the NRI\u2019s Income?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#Are_NRI_required_to_File_Income_Tax_Return\" >Are NRI required to File Income Tax Return?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#What_is_Taxable_Income_for_an_NRI\" >What is Taxable Income for an NRI?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#When_Form_15CA_is_not_required\" >When Form 15CA is not required-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#What_are_The_Special_Provisions_Related_to_Investment_Income\" >What are The Special Provisions Related to Investment Income?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#What_are_The_Special_Investment_Vehicles_That_Qualify_the_Special_Treatment\" >What are The Special Investment Vehicles That Qualify the Special Treatment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/do-you-know-about-income-tax-for-nri-in-india-10-minutes-read\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Check_the_Residential_Status\"><\/span>How to Check the Residential Status?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In end of\nthe financial year (FY), the term NRI involved the persons who stayed within\nIndia\u2019s territory for 182 days (or less) in any financial year. In March 2020,\nthe Government of India introduced certain amendments.<\/p>\n\n\n\n<p><em><strong>If you are an NRI visiting India, your residency status will change by fulfilling the below-mentioned criteria.<\/strong><\/em><\/p>\n\n\n\n<ul><li>If the person\u2019s total Indian income is more than INR 15 lakhs during a      financial year and stays for more than 120 days in the same financial      year.<\/li><li>An NRI is considered a resident of India if they are an Indian citizen whose total income (other than foreign sources) is more than INR 15 lakhs. They are not liable to pay tax in any other country.<\/li><\/ul>\n\n\n\n<p><strong><em>Let\u2019s understand the concept of the Resident But Not Ordinarily Resident (RNOR) Status.<\/em><\/strong><\/p>\n\n\n\n<p>A person\nhas visited India frequently in the first four years of the current financial\nyear of your recent visit. If the total number of days is 365 (more than four\nyears), he will be treated as a resident Indian for income tax purposes. The\nresidency status of that person will then become a resident but not a resident\n(RNOR).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Incomes_are_Included_in_the_NRIs_Income\"><\/span>What Incomes are Included in the NRI\u2019s Income?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Once the person has proved his residential status, he is\u00a0required to calculate his taxable income. If his total gross income is more than INR 2.5 lakh in a financial year, he\u00a0will be liable to pay tax.<\/p>\n\n\n\n<p><strong><em>The below discussed are the categories of taxable income<\/em><\/strong><\/p>\n\n\n\n<ul><li>Income earned from salary or professional consultation.<\/li><li>Income earned from house property (a standard deduction of 30% applies).<\/li><li>Income earned from doing business in India.<\/li><li>Income earned from other sources like Interest on NRO Deposits, dividends or gifts.<\/li><li>Income earned from capital gains arising out of the sale of assets. <\/li><\/ul>\n\n\n\n<p><h4><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/calculate-tax-salaried-individual\/\">How to Calculate Income Tax For Salaried Individual<\/a><\/mark><\/h4><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_NRI_required_to_File_Income_Tax_Return\"><\/span>Are NRI required to File Income Tax Return?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes,\nResident or non- Resident of India, any individual whose income exceeds Rs 2,\n50,000 required to file its&nbsp;<a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>income tax return<\/strong><\/a>&nbsp;in India.<br>\nThe last date to file an Income tax return in India is 31st July for Non-\nResident of India. In case, the tax liability exceeds Rs 10,000 in a financial\nyear then the person is required to pay the advance tax. Furthermore, the\ninterest under section 234B and section 234C is applicable when the person\ndoesn\u2019t pay the advance tax. File your Income-tax return now!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Taxable_Income_for_an_NRI\"><\/span>What is Taxable Income for an NRI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The taxable income is income that a person earned by the way of salary, profit or other income. The salary you receive in Indian or by any other person on your behalf is taxable in India. Therefore, in the case of NRIs, the person receives the salary directly into an India account then it will be subject to Indian tax laws. The Income-tax is taxed according to the slab rate the person belongs to.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Income Earned From Salary<\/h3>\n\n\n\n<p>The income earned from salary is considered as taxable if the services are rendered in India. So, in case you are an NRI and your salary is paid towards the service provided by you in India then it shall be taxed in India irrespective of the factor where you are getting the income.<br> Furthermore, in case your employer is Government of India and the person is a citizen of India rendering service outside India is also taxed in India. The income of Diplomats and ambassadors are exempted from tax.<\/p>\n\n\n\n<p>For example- Mr. Rohan was working in Canada on a project from an Indian company for a period of 5 years. Rohan needed the salary in India to take care of the needs of his family and make payments towards a housing loan. However, since salary received by Rohan in India would have been taxed according to the Indian laws but rohan decided to receive it in china.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Income from House Property<\/h3>\n\n\n\n<p>Income earned from a house property situated in India comes under the category of income tax for NRI. The calculation of the income shall be in the same manner as it for the resident. The property could be rented or lying vacant. An NRI is allowed to claim the deduction of 30%, or can deduct property taxes and can also avail the benefits of an interest deduction if there is a loan taken for home. The Non-Resident of India has also allowed having a deduction for the principal repayment under section 80C.<\/p>\n\n\n\n<p>In addition to that, any stamp duty and registration charges paid at the time of purchase of a property can also be claimed under section 80C. Income from house property is taxed according to the income tax slab rates.<\/p>\n\n\n\n<p><strong><em>Let\u2019s understand this with an example-<\/em><\/strong><\/p>\n\n\n\n<p>Sunita own house property in Chandigarh and has rented it out the property while she lives in Thailand. She has directed the tenant to make rent payments to be received directly in her bank account in Bangkok. Sunita\u2019s income from this house which is in India shall be taxable in India.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Rent payments to NRI<\/h3>\n\n\n\n<p>A tenant\nthat lives in NRIs house and paid rent to the NRIs owner shall remember to\ndeduct TDS at 30%. The Income can be transferred to Indian account or the NRIs\naccount where he is currently residing. This rental income of NRI raises the\nliability of Income-tax for NRI.<br>\nFor example- jiya pays a monthly rent of Rs 30,000 to her NRI landlord. She is\nobliged to deduct tax at 30% for TDS or Rs 9000 before transferring the money\nto the landlord\u2019s account. Jiya must also get a form 15CA prepared and timely\nsubmit to the Income-tax department online. Any person making remittance to a\nNon- resident India needs to submit Form 15CA online that is duly certified by\nthe Chartered accountant detailing the exact payment, DTAA if applicable, TDS\nRate and TDS deduction as per the&nbsp;<strong><em>Income act under section 195<\/em><\/strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Income_tax_in_India\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><em><sup>[1]<\/sup><\/em><\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Form_15CA_is_not_required\"><\/span>When Form 15CA is not required-<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>Remittance doesn\u2019t exceed Rs 50,000 in a single transaction and Rs 2, 50,000 in a total financial year. In that case, only Form 15 CA is required to be submitted.<\/li><li>If lower TDS is deducted and a certificate is received under section 197 for it lower TDS<\/li><li>If the transaction falls under the Rule 37BB of the Income-tax act, where the item is listed in 28 parts.<ol><li><strong>Income From Other Source<\/strong> -The next income that comes here is the income from other source. Any interest income received from fixed deposit and saving accounts held in Indian account is taxable in India. Interest on NRO account is completely taxable.<\/li><li><strong>Income From Business and Profession<\/strong> &#8211; Any business or profession who is owned or controlled or set up by the NRI is owned to pay the Income-tax. The NRI is liable to pay the Income-tax.<\/li><li><strong>Income Earned From Capital Gain<\/strong> &#8211; Any capital gain earned at the time of transfer of capital asset situated in India shall be taxable in India. Capital gains earned from any investments in India through investing in shares, securities shall also be taxable in India. If a person sold the house property and have a long-term capital gain, then, in that case, the buyer shall deduct TDS at 20%. However, a person who sold the property is allowed to claim capital gains exemption by investing in a house property as per Section 54 or investing in capital gain bonds as per Section 54EC. <\/li><\/ol><\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_The_Special_Provisions_Related_to_Investment_Income\"><\/span>What are The Special Provisions Related to Investment Income?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Whenever the NRI invests in any kind of Indian assets then he is taxed at 20%. If the special investment income is the only source of income then the income earned by the NI during the financial year, where TDS has been deducted then such NRIs are not required to file an income tax return.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_The_Special_Investment_Vehicles_That_Qualify_the_Special_Treatment\"><\/span>What are The Special Investment Vehicles That Qualify the Special Treatment?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The following are the special investment vehicles that are derived from the following Indian assets acquired in foreign currency:<\/strong><\/em><\/p>\n\n\n\n<ul><li>Shares in a public or private Indian company<\/li><li>Debentures issued by a publicly-listed Indian company (not private)<\/li><li>Deposits with banks and public companies<\/li><li>Any security of the central government<\/li><li>Other assets of the central government as specified for this purpose in the official gazette<\/li><\/ul>\n\n\n\n<p>There is no deduction allowed under section 80 while calculating investment income.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Special Provision Related to Long-Term Capital Gains<\/h3>\n\n\n\n<p>The long-term capital gains\u00a0made from selling or transfer of the foreign assets then under Section 80 there is no advantage of indexation and deductions are not allowed. But under Section 115 F exemption on the profit can be availed when the profit is again reinvested back in to:<\/p>\n\n\n\n<ul><li>Indian company shares<\/li><li>Indian public company debentures<\/li><li>Bank Deposits and Indian public companies<\/li><li>Securities of Central Government <\/li><li>Issue VI and VII of NSC <\/li><\/ul>\n\n\n\n<p>In the given above case, if the new asset cost is less than net consideration then the capital gains are exempted proportionately. The above benefit may be obtainable to the NRI even when they become a resident and until those asset is converted to money. Also they can obtain the benefit on submitting a declaration for the special provision application to the Assessing officer. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any person or Non- resident of India can file the\u00a0<strong>Income-tax return<\/strong>\u00a0by accessing the official site of the Income tax department or let us help you in that. We at\u00a0<strong><a href=\"https:\/\/corpbiz.io\/\">corpbiz<\/a><\/strong>\u00a0have the finest track record of filing the tax liability for resident and non- resident of India.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/\">Income From Other Sources- Do You Also Have?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Indian economy moves with the help of tax. The tax collected from the citizen is used to build roads, hospitals, school and to provide other amenities to the general public. It is the core foundation of the Indian economy eventually. The tax collected from resident or non- resident it doesn\u2019t make any difference to [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":23258,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[90],"acf":{"service_id":"127"},"authorName":"Archita Bhattacharjee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/WhatsApp-Image-2020-03-18-at-11.26.19-AM-1.jpeg","authorDescription":"Archita Bhattacharjee is working as Legal Analyst (Team Lead, Research &amp; Development) at Corpbiz and has proving experience about 2 years as Corporate Legal Researcher in law firms as well as Rajya Sabha and authors in diverse publications. She has refined her skills by representing India in Paris, France and the University of Leiden over implications of International Humanitarian and Criminal Law being certified member of many Legal Centers.","postViews":6190,"readingTime":6,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/207"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=207"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/207\/revisions"}],"predecessor-version":[{"id":27139,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/207\/revisions\/27139"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/23258"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}