While living in India, it is important for NRIs to file their income tax returns on time. Since NRI people in India may make savings keep their own bank accounts, house property, and other properties, they should bear in mind that filing annual returns through an NRI tax advisor in Pune helps them stay away from any tax penalties and prosecutions.
Essential points for NRIs when annual income tax returns are filed.
- NRI Must Enter Residential Status During ITR Filing
Depending on their length of stay in the given fiscal year, NRIs must decide their residential tax status in India while filing ITRs. One of the key factors for NRIs while filing tax returns in India through NRI tax services in Pune is residential status. Acclaiming the status of Indian residents by NRIs makes them liable to pay tax on their global income, while only income received from sources in India is taxed in the case of non-residents.
It should be noted that under the Income Tax Act, the resident test is distinct from that given under the FEMA or Foreign Exchange Management Act. Hence for tax purposes, the FEMA residency test should not be considered by individuals.
- Choose the Best ITR Return Form for NRI
To reduce the burden of enforcement for taxpayers in the country, the Indian government has introduced the ITR-1 Form. They can also file simplified ITR-1s for tax returns in the case of NRIs with the help of the NRI tax advisor in Pune. Such NRIs, however, should also total annual revenues of less than INR 5 million. For individuals who receive income from their wages, single house property, and other sources such as interest, ITR-1 is also applicable. ITR-2 should be submitted by those who do not fall under the ITR-1 group and have taxable income from more than one home property.
- Foreign bank account disclosure is optional in ITRR
According to the CBDT statement dated 24 July 2017, if they do not demand a tax refund, it is not necessary for non-residents or non-citizens in India to reveal details of their foreign bank account in the ITR.
For those non-residents who demand a tax refund under ITR but do not have a bank account in India, details of the most recent refund issuance of one foreign account should be listed. Furthermore, it is also not mandatory for NRIs to reveal information in the ITR regarding properties and financial interests held outside India.
- Put detailed ITRR information on assets & liabilities
NRIs with a total income above INR 5 million must provide cost information of such properties located in India (both movable and immovable) and their related liabilities, according to assets and liabilities (Schedule AL). Under ITR 2,3 and 4, the schedule is listed.
In order to prevent any heavy fines and interest levied by the government, taxpayers (both resident and non-resident individuals) in India should file their income tax returns on time. For NRIs, during ITR filing through NRI tax services in Pune, they should furnish all the information in the most suitable way and must do so before the due date. The return filing experience of NRIs can be made smoother by recalling the above points.
