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nri income tax when to file

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income tax filing nriIncome tax filing is a tedious task for every working person in the country and if the person is Non Resident Indian (NRI), then things become more tedious, as he has to follow the Income Tax rules of two countries simultaneously. Even the tax treatment for an NRI compared to a domestic resident is different. The basic benefits that are given to the person living in India are not given to NRI’s in most of the instances. As the last date of filing income tax returns for Financial Year (FY) 2012-13 is near, here are few guidelines which can help NRI in filling ITR.

Source of Income Generation:

NRI’s have to file income tax return if he has any taxable income in India. Income Tax Department considers even the future income, i.e income which is received or still to be received in India is perceived for tax. Similarly, any income that is accrued or still to be accrued within India is treated for taxes.

The disadvantage being an NRI is that the tax treatment is same whether you are male or female. The IT department treats a person as NRI and even the age factor is not taken into account. For Example: If you are a Senior Citizen in India, the Income up to 2.5 lakhs is Nil, while this is ignored if the Senior Citizen is an NRI.

When an NRI is taxed?

The liability of filing a tax return occurs only when some predetermined conditions are met by the company. The rule book of Income Tax of India, 1961, says that any NRI whose income in the financial year exceeds the amount which is not chargeable under the act comes in the category of taxable income. This means that the Income for NRIs who are wondering whether they will have to file tax for Financial Year 2012-13; their income should be more than Rs 2 lakhs.

He will also be liable to file taxes, if the total income was due to Long Term Capital Gains (LTCG) from assets or investments. It should be noted that in case the only income is LTCG from the foreign exchange asset, it will not be liable for taxes as TDS would have been already deducted from that income.

However, there are obvious demerits being an investor in Equities or Mutual funds in India. These investments are taxed in India even in cases where the only income is investment income and it is less than Rs 2 lakh.

The return filing date is 31 July 2013. However, return filing is to be done only when you have a Permanent Account Number, which in the case of NRI is Form 49A.

Take into account the changes made by Income Tax Department

If you are an NRI with income of more than Rs 5 lakhs, then you will have to file the return in electronic form. The details of Form 26AS should also be matched correctly with the tax return filed by the Non Resident Indian. FORM 26 AS is a system of matching the tax details, like TDS paid by the NRI with the Income Tax Return. The income tax return and FORM 26AS mismatch can be due to variety of reasons. One case can be the wrong filing of tax details by the individual, in other cases it can be due to wrong tax calculation and deduction on the part of the IT official. Delay in TDS deposits also results in mismatch.

Income Tax provisions can be made more comforting in order to bring more persons in the tax net. Especially, for NRI’s, who are a good source for foreign inflows in the country, an impartial tax treatment is uncalled for. Till the time provisions are revised, keep in mind 31st July as the date of filing of your return with existing provisions, how so ever stringent they might be.


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