Professional Tax Return Filing
March 23, 2023
Repatriation of funds of NRI from India
March 26, 2023
Benefits of Income Tax Return Filing by NRI
Income tax liability and scope of taxable income for any taxpayer depends upon his residential status in the financial year in which income accrues or arises to him. Hence it becomes very important to decide the correct residential status of a taxpayer. Taxpayer refers to any person be it individual, firm or company. Tax laws applicable to Non-resident Individuals (NRI) are different from tax laws applicable to resident individual. There are many benefits of Income tax filing by NRI such as claiming income tax return , carry forward of loss etc. Process for Income tax return filing for NRI is online. Income tax department launched AIS Annual Information Statement which can help NRI to disclose there taxable income in India. AIS captures all transaction such as share trading , tds , bank interest etc. Income tax department know much about your income. Hence its NRI disclose his status of residence and file income tax returns.
Benefits of filing ITR -Why should NRI file ITR?
It is seen that many people dont pay attention for filing ITR on due date for various reasons. But heavy interest and penalty can be levied by department for non-filing of return.
Below are some points stating importance of filing NRI Income Tax return
Refund of TDS : If TDS is more than the actual tax liability of NRI, then by filing ITR refund can be claimed by NRI.If ITR filed with delay then it get processed delay and as a result refund will get delayed.
Carry forward of losses: If person has any unabsorbed losses, same can be carried forward over specified years subject to prescribed conditions. But, it is allowed only incase ITR is filed by assessee within due date. Hence, to take benefit of carry forward of lossess one must file ITR on time even though no tax is payable and income is below threshold.
Levy of Interest and Penalty: Interest @1% will be levied on tax liability in addition to tax amount. Hence, when one fails to file ITR within due date, he is liable to for double interest-normal interest u/s 234B and penal interest for non-filing of ITR. In addition to this, penalty u/s 234F is applicable if ITR not filed within due date. This penalty ranges between Rs.1,000 to 10,000.
No filing option afterwords: According to current tax provisions, once relevant assessment year is over, you cannot file ITR even withlate fees. Hence, it becomes very important to file ITR in time.
Income tax notice or scrutiny: Currently, various government department, banks, registry office and other institutions are linked with each other by online platform. If any income is earned by assessee, IT department will get that and reflect in 26AS or AIS/TIS. In such case if you have not filed ITR and not disclosed that income, you may get notice of Incoe tax department or notice of scrutiny as well in some cases.
Important document: ITR documentation and compliance is helpful for repatriation of income. ITR is considered as very important document which can be used for submission before authorities for VISA purpose, foreign remittance, loan,etc.
It helps to show financial stability of taxpayer.
Filing of ITR helps to stop tax evasion.
When its compulsory to file ITR by NRI
There are some specific cases where filing of ITR becomes mandatory for NRI, those are-
It is important to know that if NRIs long term capital gain exceeds basic exemption limit then it becomes mandatory for them to file ITR irrespective of its other heads of
When taxable Income of NRI is less than the Basic exemption limit but his Exempt Income is more than the Basic Exemption Limit then, he is required to file the ITR mandatorily irrespective of the fact that the taxable income is less than the Basic exemption.
And all persons whose taxable income exceeds basic exemption limit (i.e. 2,50,000)are mandatorily required to file ITR in applicable ITR forms.
Due Date for Filing Income Tax Return Filing by NRI
Due date for filing Income Tax Return (ITR) by NRI is 31st July for non-audit assessee and 31st October for audit applicable assessee. Government has power to extend the due date, if thinks fit to do so.
How can I verify my NRI ITR?
NRI can verify ITR by sending signed acknowledgement to CPC or by e-verifying within 30 days of filing of ITR.
Penalty for Non Filing Income Tax Return Filing by NRI :
If income of NRI for relevant yaer is above RS.5 lakh-
Penalty of Rs.5,000 – If ITR filed before 31st December of Assessment year
Penalty of Rs.10,000- If ITR filed after 31st December but before 31st March of Assessment year.
If income of NRI for relevant yaer is below/upo RS.5 lakh-Penalty of Rs. 1000 will be applicable.
Furnishing Aadhar number is not mandatory for NRI:
As per the CBDT , NRIs living in India are not required to mandatorily quote their Aadhar number details while filing ITR.
Frequently Asked Questions:
1. Who is NRI?
An NRI is an Indian citizen who stays outside India:
(a) for purposes of carrying out employment or any business or vocation;
(b) under circumstances indicating an intention to stay outside India for an uncertain duration;
(c) any Indian citizen deputed outside India for a temporary period in connection with employment.
2.How can I verify my NRI ITR?
NRI can verify ITR by sending signed acknowledgement to CPC or by e-verifying within 30 days of filing of ITR.
3.Can NRI File Belated Income Tax Return:
Yes, NRI has time of one year i.e. till end of relevant assessment yearto file belated Income Tax Return with applicable interest, penalty and late fee.
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