Skip to main content

Income Tax for NRI: Decoding Tax Implications for NRIs

It is imperative for an individual to define his/her residential status to determine the taxability of income earned by such taxpayer. An individual is a resident of India (for tax purposes or otherwise) if:
·         He/she has lived in India for at least 182 days during the financial year.
·         He/she has lived in India for at least 60 days of a year, in the previous year, and at least 365 days in the preceding four years.

If an Indian citizen leaves India in any year for the purpose of employment, or as a member of a crew of an Indian merchant ship, the period of ‘60 days’ is to be replaced by ‘182 days.’ Similarly, when An Indian citizen or a person of Indian Origin (PIO) who is abroad coming to visit India, the period of ‘60 days’ is to be replaced by 182 days. If you satisfy any of the two conditions, you are a Resident Indian. Else, you have deemed a Non-Resident Indian (NRI).

If you reside and work abroad, the NRI income tax you pay will depend on your residential status for the year. If you fit the Resident Indian criteria, your total global income is taxable under Indian tax laws. But if your status for the year is ‘NRI’, only the income earned or accrued in India is taxable.
Ø  The NRI income tax be levied on the following:
·         Salary received for services provided in India (Global Income)
·         Capital gains earned on the transfer of assets located in India
·         Rental income from property owned in India
·         Revenue from Fixed Deposits 
·         Interest on Bank Savings Accounts

NRIs can avail of the tax deductions under Section 80C. Currently, a maximum deduction of up to Rs 1.5 lakh is permissible for tax deductions under the said the section in Life insurance premium payment, Repayment of principal on loan for the purchase of property investment in ELSS etc.An NRI can also claim a deduction on premium paid for Health Insurance under Section 80D of the Income Tax Act, 1961but it is available for premiums paid up to Rs 25,000 on insurance paid for self, spouse and dependent children. In the case of senior citizens, this amount increases to Rs 50,000.

The information provided in this article is for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to visit https://www.incometaxindia.gov.infor more information on the taxation norms for an NRI or contact a tax consultant for specific professional advice pertaining to your situation or query or doubt.


Comments

Post a Comment

Popular posts from this blog

Pink City Jaipur Gets UNESCO World Heritage Tag!

The Walled City of  Jaipur,  popularly known as the 'Pink City' is famous for its iconic architectural legacy and vibrant culture, on July 6 made its entry into the UNESCO World Heritage Site list during the 43rd Session of the World Heritage Committee held at Baku, Azerbaijan. A World Heritage Site is a location having an “Outstanding Universal Value,” and has common significance for present and future generations of all humanity. The city was proposed to be nominated for its value of being an exemplary development in town planning and architecture that demonstrates an amalgamation and important exchange of ideas in the late medieval period. The city of Jaipur was founded in 1727 AD under the patronage of Sawai Jai Singh II. It serves as the capital city of the culturally-rich state of Rajasthan. Interestingly, this is India’s 38 th inscription into the World Heritage list, India already has 37 world heritage sites, that include 29 Cultural properties, 7 Natural propertie...
Post a Comment
Read more

Tarnetar Fair

One of the many vibrant festivals of Gujarat, Tarnetar Fair is the annual festival that takes place in Sundernagar,  Gujarat— a tiny village, about 200 km away from Ahmedabad.  This is inspired by  Draupadi's  swayamvara , and is a celebration of ethnic Gujarat’s folk-dance, music, costumes, and the arts, centered around young tribal men and women seeking marriage partners. Here many kinds of folk dances are performed; by far the most popular is the  raas , in which dancers hold sticks to clack against those of other dancers. As many as one to two hundred women perform  ramadas  in a single circle, to the beats of four drums at a time and the tunes of  jodia pavas  (double flutes). Rabari women of nearby Zalawad perform the famous circular folk dance called  rahado . Their marital status is indicated clearly by their costumes; a black  zimi  (skirt) means she is married. But if a woman is wearing a red  zimi , it means s...
Post a Comment
Read more

5 FEMA Rules Every NRI Should Know

The Foreign Exchange Management Act (FEMA) is a law enacted by the Government of India in 1999 to control the flow of foreign currency across Indian borders.FEMA aims to facilitate external trade and their payments in India, a systematic improvement and continuation of foreign exchange in the Indian market.It’s important for Indians working abroad to understand FEMA rules for NRIs very carefully since it can affect the way they can send and receive funds from India.Let’s look at five FEMA Regulations for NRIs: 1.        Maintaining a Bank Account You need to operate bank accounts that are specifically designated for NRIs. FEMA rules for NRIs do not allow holding a savings bank account.  There are 3 major types of accounts as stipulated by the Reserve Bank of India (RBI)that you can open: - NRO account  - If you want to send money earned abroad back to India. - NRE account  - For repatriable or moveable assets like securities and cas...
Post a Comment
Read more