Scrutiny of tax return filed by

NRIs in India . . .

NRIs who file tax in India are subject to all income tax laws similarly applied to Indian tax filers. Just because a tax return has been filed and even if a tax refund has been issued based on the tax return filed by an NRI the refund can in some instances be questioned and further clarification sought by the Indian tax authorities. For instance you may get a notification stating something like “Your Income-Tax Return has been identified under risk management process of the Income-Tax Department. Your confirmation is required on the following claim(s)/ deduction(s)/omissions in the return.” This type of communication will provide the reasons for issue of such notice and generally you require to respond within 30 days or so. The response until date will be shown on the notice email. Sometimes an NRI tax filer will get a notice saying their ‘Return is defective” and request a response. In such cases you need to recheck the return filed to ensure your filling is correct and then through your online tax account respond by selecting that your return is correct or if you think it is not correct then to refile the return. All these actions are time limited and you should ensure you respond in a timely manner. Failure to do so will result in reassessment of you return and any refunds issued based on your earlier filed return will be canceled and you will have to refund the amounts with interest to the tax department. The best course to handle notifications such as these from the Indian tax department is to hire an experience chartered accountant to handle the paper work for you. Scrutiny of Tax Returns Filed by NRIs in India NRIs who file tax returns in India are subject to the same income tax laws as resident Indian taxpayers. Even if an NRI has filed a tax return and received a refund, the Indian tax authorities may still scrutinize the return and request further clarification. For example, you may receive a notification stating something like, “Your Income-Tax Return has been identified under the risk management process of the Income-Tax Department. Your confirmation is required on the following claim(s)/deduction(s)/omissions in the return.” This type of communication will outline the reasons for the notice and usually requires a response within 30 days. The deadline for the response will be indicated in the notice email. In some cases, an NRI may receive a notice indicating that their return is "defective" and requesting a response. In such situations, you should review your filed return to ensure its accuracy. Through your online tax account, you can respond by either confirming that your return is correct or, if you find an error, by refiling the return.

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