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NRI Income Tax Filing – NRI Tax Consultants In Chennai

Taxation is the primary source of revenue for any government and is based on the theory of the maximum welfare of society. The rates of income tax are different for people who are residing in India and for those who live overseas.

According to the statistics, there are 32 million NRIs and PIOs residing outside India, and India is the largest country of origin for expatriates and immigrant communities with a 55 million-strong diaspora across the globe.

In this article, we will try to guide you about everything you should know regarding the NRI income tax filing and also assist you with our highly recommended NRI advisory services in Chennai. Let’s start with the basic concepts.

How are NRIs taxed in India?

An NRI or a Non-Resident Indian is a person who:

  • Resides in India for less than 182 days during the financial year, or
  • Stays outside India for employment, or
  • Lives outside India for any other purpose for an uncertain period

After the presentation of Budget 2020 by our Honorable Finance Minister Mrs. Nirmala Sitharaman, She has included some additional points to treat an Individual as a Non-resident, Such as

  • Resides in India for less than 120 days during the financial year
  • Taxable Income from Indian Sources does not exceed Rs. 15 Lacs, and
  • Resides in India for less than 365 days in the preceding four Financial Year.

If an Individual does not meet the above new conditions, Then such Individual’s Indian Income will be taxable as per his/her taxable brackets as Resident and not Ordinarily Resident. If an Individual satisfies the new conditions, Then Such Individual will be taxed as per the erstwhile conditions.

Another new provision was added by finance minister while presenting Budget 2020, Named it as Stateless Income

  • An Individual who is a citizen of India
  • Has no tax liability in any other country or territory by reason of his domicile or residence.
  • Taxable Income from Indian Sources does not exceed Rs. 15 Lacs,

If an Individual satisfies the stateless income conditions, then such Individual will be deemed to be resident and  income will be taxed as Resident and not Ordinarily Resident. However This Stateless Income Concept is not applicable to Overseas Citizen of India (OCI).

NRI Tax Consultants in Chennai

In case of an NRI, Income Tax Returns are filed under the following circumstances:

  • Salary earned in India
  • Any income received in India
  • Revenue from the sale or rent of property in India
  • Income earned outside India but received in India

What is the tax slab for NRIs?

There is no tax charged for a yearly income up to Rs.250,000. NRIs are taxed at 5% for income between Rs.2,50,000 and Rs.5,00,000 per annum. The tax rate is 20% for income between Rs.5,00,000 and Rs.10,00,000 per annum. Income above Rs.10,00,000 per annum is taxed at 30%.

Income Range Tax Rate (Old Regime) Tax Rate (New Regime)
Up to Rs.2,50,000 No tax No tax
Between INR 2.5 lakhs and INR 5 lakhs 10% 5%
Between INR 5 lakhs and INR 7.5 lakhs 20% 10%
Between INR 7.5 lakhs and INR 10 lakhs 20% 15%
Between INR 10 lakhs and INR 12.5 lakhs 30% 20%
Between INR 12.5 lakhs and INR 15 lakhs 30% 25%
Above INR 15 lakhs 30% 30%

Apart from this, income from other sources such as mutual funds, shares, house property, fixed deposits and winning a lottery is also taxable in India for NRIs.

Also, there is a separate tax bracket for people under 60 years and people who are 60 years and older and those who are above 80 years of age.

How can NRIs avoid double taxation?

Double taxation refers to the process in which an income is subject to taxes twice. Generally, NRIs live overseas but earn income in India, and this can lead to double taxation in many cases.

India has signed DTAA, that is, Double Tax Avoidance Agreement, with several countries so that NRIs can avoid paying double tax.

Some of the countries with which India has signed a DTAA

Country DTAA TDS Rate
The United States of America 15%
United Kingdom 15%
Canada 15%
Australia 15%
Germany 10%

NRIs can avail tax relief under the DTAA method by filing Form 10F, a tax residency certificate and self-declaration in the prescribed format to the entity responsible for deducting tax at the source.

Why do NRIs need to contact NRI tax consultants?

 If you are not careful, the investment or financial calculations that looked perfect initially can lead you into hefty tax payments, impacting your overall personal income. Our NRI tax consultants team in India can offer you a wealth of training, knowledge, qualification and experience that is difficult for you to achieve yourself.

  • Ensure that all possible tax implications have been considered before going ahead with an investment
  • Make you aware of ways to reduce your overall tax burden
  • Advice about the investments that offer long-term gains
  • Analyse your financial data with high accuracy
  • Help you make an informed decision
  • Save time and money
  • Gain tax efficiency
  • Mitigate risks

We offer specialised and customised services to NRI’s and PIO’s settled abroad. Some of the NRI taxation services offered by us include:

  • Filing of return of income and wealth
  • FEMA/RBI related compliances
  • Capital gains and sale of property advice
  • Repatriation of funds out of India
  • Transfer Pricing Compliances for corporates

Our vision is not to make your business fit to our services; instead, we strive to make every effort to see how our services can be tailored to add value to your business.

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