NRIs Shall Soon File Income Tax Return in India for FY 2017-18

Income tax return filling is a daunting task for NRIs even the slightest mistake or mismatch can land them in a trouble. To make the matter worse, the Income Tax Department has now attached a penalty for missing the deadline i.e. July, 31.  Here, you will get to know whether you are an NRI as per Income Tax Act and what should you do.

The NRIs can either file the tax return, by themselves or take the help of a chartered accountant or an expert to file the returns. If they file the returns on their own, they need to understand the process fully. There are certain rules and regulations that an NRI need to adhere to while filing the returns.

Income Tax Return Filing for NRI

Irrespective of whether you are an NRI or not, if your income exceeds Rs 2, 50,000 you are liable to file an income tax return in India. NRI need to file the returns if

• They wish to claim a refund
• They have a loss which they want to carry forward for the next year

Residential status of their income

Whether an NRI is liable to file Income Tax return or not depends upon his residential status for that particular year. If the status suggests that you are resident, your global income will come under the ambit of Indian income tax authority.

If you are an NRI/PIO (Person of Indian Origin), the salary received in India or income from the house property situated in India or capital gains or income from fixed deposits is taxable for NRI.

You are considered as an Indian resident for a financial year

• If you were in India at least 6 months during the financial year  Or

• If you are in India for at least 2 months and have lived at least for 365 days in last four years

Do NRI need to pay advance tax?

An an NRI, if the tax liability is more than Rs 10,000 in a financial year, then you need to pay advance. If you are not able to that, you will be penalized for that under Section 234B and 234C of the Income Tax Act. This is applicable if you are minting money from sources other than the monthly salary.

When should you file the returns?

Deadline for return filling for financial year 2017-18 is 31st July 2018 post which a taxpayer will have to pay penalty as per the guidelines. An NRI has to file the income tax returns in the ITR-1 form. However, if the income should not be above 5 million and in case the taxable gains or income is from more than two properties, the NRI has to file ITR Form-2.

NRIs need to completely understand the tax formalities before filing income tax returns and this article is a step towards it.