Q. Whether every individual coming to India from a foreign country and leaving India for work in a foreign country is called an NRI?
Ans: The answer is no; not everyone can be referred to as an NRI.
An individual can be called an NRI if the following conditions are not met:
The individual was present in India for a period of at least 182 days (roughly 6 months) in the financial (previous) year. OR
The individual was in India for at least 60 days (roughly 2 months) in the previous year and was present in India for 1 year (365 days) in the last 4 years.
Q. Which income is taxable for NRIs in India?
Ans: The income of NRIs accrued or earned in India is taxable in India which can be from Salary, House property, Capital gains for an asset situated in India or any interest earned.
Q. Is there any income earned by NRIs which is exempted from tax?
Ans: Yes, Section 10(4) provides that the following income is exempt in the hands of NRIs:
- any income by way of interest on certain notified securities or bonds (including income by way of premium on the redemption of such bonds)
- any income by way of interest on money standing to credit in a Non-Resident (External) account, commonly known as the NRE Account in any bank in India in accordance with the FEMA, 1999, and the rules made thereunder.
Q. Under what conditions NRIs have to mandatorily file their income tax returns?
Ans: Any individual whose income exceeds Rs. 250000 in a financial year is required to file a return of income.
NRIs must file their return in case they want to claim a refund or they have loss that they want to carry forward.
Q. What is the due date to file a return for NRIs?
Ans: NRIs have to file their return of income by 31st July.
Q. Akansha lives and works in US and has a TDS entry of Rs. 20000 in her 26AS in relation to interest earned on NRO account. Does she need to file a return?
Ans: There is no need for Akansha to file a return of income as it was her only income earned or accrued in India and as the total income is less than Rs. 250000 she does not need to pay any tax in India.
But, in case she needs to claim a refund of this amount than she must file her return.
Q. How are NRIs taxed for the sale of properties in India?
The buyer of the property is required to deduct TDS @ 20% in case of Long term capital gain and TDS @ 30% in case of Short term capital gain.