
- When is a NRI compulsorily liable to file a Return of Income (ROI) in India?
A NRI is liable to file ROI if his/her taxable income in India during the relevant Financial Year (F.Y.) (1st April to 31st March) exceeds the basic exemption limit (i.e. Rs. 2,50,000/- for F.Y. 2017-18 and F.Y. 2018-19).
However, if income is less than the basic exemption limit, aNRI is liable to file ROI:- if total income includes:
- Income from Short-Term Capital Gains on equity shares or units of equity oriented mutual fund on which securities transaction tax is charged.
- Income from Long-Term Capital Gains on any asset, which are chargeable to tax.
- Other incomes chargeable to tax irrespective of the basic exemption limit.
- NRI has obtained a Tax Exemption Certificate/ Lower Tax Deduction Certificate from the IncomeTax Department.
- total income during the F.Y. consisted only of investment income* or income by way of long-term capital gains** or both; and
- tax deductible at source (TDS) has been deducted from such income.
Also, if the income is more than the basic exemption limit, a NRI is not liable to file ROI if:* “investment income” means any income from a foreign exchange asset (FEA) other than dividends income from Domestic Company from FEA.
** “Long-term capital gains” means income capital gains on selling a long term FEA.
“FEA” means any specified asset which acquired or purchased with or subscribed to in, convertible foreign exchange; - if total income includes:
- Due dates for filing ROI for any F.Y. ending 31st March:
- Due date – By 31st July following the F.Y. ending 31st March
- Beyond the due date :
- NRI is permitted to file a belated ROI within a year (12 months) following the end of FY or completion of assessment which ever is earlier.
- If there is a delay beyond the above, NRI is permitted to file ROI by obtaining prior approval from Income Tax Department for condonation of delay.
- Revision of ROI filed:
NRI is permitted to file a revised ROI within a year (12 months) following the F.Y. ending 31st March or completion of assessment which ever is earlier. - Manner of filing ROI:
ROI is to be filed electronically through independent portal.
www.incometaxindiaefiling.gov.in established by Income Tax Department, Government of India in the prescribed forms given below:
ITR 2 – Declaring all income Other than Profit and Gains from Business and Profession.
ITR 3 or ITR 4 – Declaring income from Business and Profession along with all other sources of income.
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Reporting of Assets and Liability Schedule/Foreign Assets:
- Assets and Liability (AL) Schedule
A NRI is mandatorily required to report Specified Assets and Corresponding Liabilities held in India, if the total income in India exceeds Rs.50,00,000/- in a F.Y. - Foreign Assets
A NRI is not required to report details of foreign assets held by him/her while filing ROI.
- Assets and Liability (AL) Schedule
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Benefits of filing ROI voluntarily:
It is advisable to file ROI even if it is not mandatorily required due to following reasons:- To claim refund of excess Tax Deducted at Sourcewith interest at 6% p.a.
- To be eligible to carry forward losses to be set-off against future income.
- NRI may file ROI in some years and may not file in some years. However, if he/she receives a notice from the Income Tax Department to file ROI, he must respond by filing ROI for the relevant F.Y.
- The updated tax information/records help a NRI to comply with procedural documentation for repatriation of income and assets held in India. It also helps to have records as and when he/she returns to India.
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Consequences of filing ROI after due date:
- If ROI is not filed before the due date, NRI shall not be allowed to carry forward losses to the subsequent years.
- NRI is liable to pay interest at the rate of 1% per month or part of month on the outstanding tax payable till the ROI is filed.
- There will be mandatory levy of fees depending on the quantum of income declared and date of filing the ROI as under:
- If the quantum of income declared is less than Rs. 5 lacs, the fees levied shall be Rs. 1,000
- If the quantum of income declared is more than Rs. 5 lacs, the fees levied shall be Rs. 5,000 for ROI filed until 31st December following the end of F.Y., else fees levied shall be Rs. 10,000.
- In case of willful delay of filing ROI, NRI may be subject to penalty and prosecution.
Content Partner- For any assistance / information on Tax, FEMA or related matters, you may write to our empaneled professional at nrihelp@gpkapadia.com
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