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The income tax rules applicable for NRIs (Non Resident Indians) differ from that of the resident Indians. It is important to note that NRIs should pay taxes for capital gains or income they earn in India.
According to the Income Tax department, an individual is categorised as a non-resident Indian under specific conditions as listed below:
- He or she lives outside India for 182 days in the previous year
- He or she does not stay in India for 60 days during the previous year and 365 days or more for four years prior to the previous year
Taxable Income of NRIs:
According to Foreign Exchange Management Act and Income Tax Act, 1961, a NRI can should taxes under specific conditions as listed below:
-
Taxable income in a financial year in India is above Rs.2 lakh (exemption limit)
-
Long-term or short-term capital gains earned from the sale of any property
The following table consists of details of taxable income of NRIs
| Particulars | Description |
| Income from House Property and Home Loan |
|
| Salary | Any income earned in India or even received on the behalf of a NRI can be taxed. In other words, if a NRI receives his or her salary for services in India, it is liable to be taxed |
| Investment |
|
| Income from other sources | The interest income accrued from savings bank accounts and fixed deposits held by a NRI in India are liable to be taxed |
| Investment Income |
|
Deductions Available to NRIs:
The following table shows the deductions and exemptions available for NRIs
| Particulars | Deductions |
| Section 80C |
NRIs can avail of the following deductions under section 80C
|
| Section 80D | Premium paid a health insurance policy |
| Section 80G | Donations on social service activities |
| House property income for NRIs | NRIs can avail of deductions for Income from House Property in India, property tax and interest income on home loans |
| Section 80E | Interest earned on an education loan |
| Section 80TTA | Up to Rs.10,000 can be claimed as deduction on interest income on savings bank accounts |
Deductions Unavailable to NRIs:
NRIs cannot avail of the following deductions available under the IT Act, 1961
- Investment under RGESS under section 80CCG
- Differently-abled under Section 80U, Section 80DD and Section 80DDB
- Investments which are unavailable to NRIs are listed below:
- Senior Citizen Savings Scheme
- National Savings Certificates
- Post Office 5 Year Deposit Scheme
- Public Provident Fund
- TAX
- Income Tax Refund Status
- Pay Tax with Credit Cards
- Direct Tax
- Indirect Tax
- Stamp Duty
- Education Cess
- Entry Tax
- Road Tax
- Union Budget
- Income Declaration Scheme
- Tax Rebate
- Tax Planning
- Self Assessment Tax
- OLTAS
- Green Tax
- Deferred Tax
- Inflation Index
- Advance Tax
- HRA Calculation
- Gratuity
- Gross Salary and CTC
- Professional Tax
- Gross Salary
- VAT Return
- VAT Calculation
- VAT and Service Tax On Restaurant Bill
- VAT
- Sales Tax
- Central Sales Tax (CST)
- Capital Gains Tax on Shares
- Capital Gains Tax
- Capital Gain Calculator
- Service Tax
- Service Tax On Rent
- Filing Service Tax Return
- Goods And Service Tax (GST)
- ESOP
- 7th Pay Commission
- Income Tax
- Income Tax Slab
- Income Tax Slabs 2017-2018
- Income Tax Return
- Income Tax Refund
- Income Tax for Senior Citizens
- Which ITR To File
- Medical Reimbursement
- ITR-V to Income Tax Department
- Income Tax For Pensioners
- Income Tax Calculator
- Income From Other Sources
- Income From House Property
- How To Calculate Income Tax
- e-Filing ITR
- TDS
- How To Calculate TDS From Salary
- How To Claim TDS Refund
- Conveyance Allowance
- Dearness Allowance
- Leave Travel Allowance
- Special Allowance
- TDS Rates Chart
- TDS Rates 2016
- Medical Allowance
- Tax Benefit On Tuition Fees
- City Compensation Allowance
- Double Taxation Avoidance Agreement
- Tax Exemptions
- Tax Benefits On Loans
- Tan Number
- How To File TDS Returns
- Tax Deductions Under 80C
- Tax Benefits For Consultants
- Advance Tax Exception
- TDS on Immovable Property
- Fringe Benefit Tax
- Tax Benefits For Education Loans
- Agriculture in Union Budget
- Union Budget for Rural Sector
- Budget for Youth Employment
- Budget for Health Care Sector
- Railway Budget
- Union Budget for Energy Sector
- Union Budget for Financial Sector
- Fiscal Situation
- Funding of Political Parties in Budget
- Union Budget for Defence Sector
- Union Budget Expenditure
- Union Budget Receipts
- Budget Appropriation Bill
- Finance Bill
- Union Budget Analysis
- Union Budget for Senior Citizen
- Union Budget for Logistics Sector
- Maternity Benefits from Union Budget
- Deduction Under Section 80G
- Deductions Under 80C
- Form 10C
- Form 16
- Form 16 And 16A
- Form 16A
- Form 16B
- Form 24G
- Form 24Q,26Q,27Q,27EQ,27D
- Form 26AS
- Form 27C
- Form 49B
- Section 234A, 234B And 234C
- Section 24
- Section 80C and 80U
- Section 80CCF
- Section 80CCG
- Section 80DD - Deductions On Medical Expenditure
- Section 80E
- Section 80U
- Section 87A
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News About NRI Taxation
-
Income received from overseas ventures will be taxed in India
by BankBazaar posted on 24th October 2016
As per the Income Tax Department’s directives, it is being said that income received from overseas companies will be liable for tax in the country.
Say for instance, an individual is rendering a service to an Australia-based company and is getting paid in AUD. The person is then depositing this income into their Indian bank, they will have to pay taxes depending on the tax slab they fall under.
Because they are liable for taxes, they are also eligible for tax exemptions depending on their tax status. They can claim exemptions based on Section 80 C, E and other such section which allow taxpayers to claim deductions for HRA, conveyance, and other things like this.
