NRIs are required to pay tax on income earned, accrued, arisen, or deemed to be accrued or arisen in India. This article will look at the four steps involved in filing income tax for NRIs in India.

How to File Income Tax for NRIs in India | 4 Step NRI Income-Tax Filing Process

  1. Determine the NRI’s Residential’s Status

At the outset, you must determine the residential status concerning the financial year. It is done through u/s 6 of the Income Tax Act 1961. However, an NRI must stay abroad for 182 days or more. If not, the person is considered a resident.

  1. Calculate the Taxable Income

Next, calculate the taxable income. To do so, you must calculate the total gross income. Gross income is the total income before tax deductions. NRIs must pay taxes if their gross income before tax deductions is above INR 2.5 lakh. Income earned through salary, mutual funds, shares, NRO deposit interest, etc., is considered part of the gross income.

Nevertheless, NRIs can claim benefits under tax treaties. They can claim refunds for TDS deductions. But to do so, NRIs have to reconcile TDS credit and advance tax as it reflects in Form 26AS. In both cases, it is imperative to file returns. Here the gross income is not relevant. NRIs can claim a deduction of up to IN 1.5 lakh u/s 80c of the Income Tax Act. If an NRI’s income is above INR 50 lakh, they must report their assets and liabilities in India.

  1. Claim the Double Taxation Treaty Advantage

Double Tax Avoidance Agreement (DTAA) helps NRIs avoid paying tax twice on the same income. It comprises tax exemption from a tax deduction in a specific country or taxed at a lower rate in the NRI’s home country. If an NRI has already paid tax in India, they can get a tax credit in their country of residence on the tax paid on the same income.

  1. ITR Verification

The last step is to verify the filed ITR within 120 days. Failure to do so turns the ITR invalid.

File ITR Returns with ANGCA

Are you an NRI looking forward to filing an ITR return? Connect with ANGCA. The firm is a team of experienced tax professionals and consultants that ensure comprehensive hand holding while filing ITR returns. To know more, write to or call +91-7722063311.

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