NRI Information for OCIs - PIOs on PAN Cards, OCI, Visas, Property, Immigration, Customs Duties & more
NRI Taxation in India . . . Who must pay taxes in India . . .
When it comes to tax liability in India for NRIs, the most common questions are:1.Will I be taxed in India if I visit India and stay there for more than 60 days in a year?2.Will I have to file income tax return in India if I spend six months in India?3.Will I have to pay tax on my foreign income in India, if I spend more than 182 days in India?Let's consider the three questions mentioned above: 1.Simply visiting India for 60 days does not make a tourist liable to file tax returns in India.2.The mere fact, that a person spends six months in India does not make them liable to file an income tax return, in India. The requirement to file a tax return in India generally arises, if there is income involved. In case a person visits India and has no income, the requirement to file a tax return does not arise. 3.By staying in India for 182 days in a financial year, you become a resident for tax purposes in India. That is any income you earn in India, is taxable in India. However, by simply staying in India over 182 days does not make your foreign income taxable in India. There are other conditions that must be fulfilled for your worldwide income to be taxable in India.
NRI global income not taxed by simply staying more than 182 days in India
NRIs should not assume that just because they stay in India more than 182 days, their worldwide income will become taxable in India.A stay over 182 days makes you a resident and any income in India is taxable, however your foreign income is exempt if you have been non-resident in India for 9 out of 10 immediately preceding financial years, or if your stay in India does not total 730 days or more, in the preceding 7 financial years.
When should NRIs file income tax returns in India?
If you are an NRI, you would have to file your income tax returns for 2011-2012, if you satisfy either of two conditions mentioned below:1. You have earned short-term or long-term capital gains, from sale of any investments or assets, even if the gains are less than the basic exemption limit.Or2. Your taxable income in India during the year 2011-2012 was above the basic exemption limit of Rs 1.8 lakh. In case you are a senior citizen, your exemption is still Rs.1.8 and not Rs. 2.5 lakh that senior residents in India, are allowed. Nri's should note that the enhanced exemption limit for senior citizens and women is applicable only to residents, and not to non-residents. Suppose your only income in India that was derived from:1. Your bank accounts, such as interest income. 2. Capital gains income.If tax by way of TDS was deducted at source from such income, then you need not file a tax return, unless you wish to get a refund for some or all the tax deducted at source. Suppose your taxable income for the year was below Rs 1.8 lakh but the bank deducted tax at source on your interest amount, you can claim a refund by filing a tax return.