Non-Resident Indian, NRI is an Indian citizen or a person of Indian origin but who lives outside India and carries out a business of profession. Non-Resident Indian is recognized according to the section 6 from Income Tax Act, 1961 if the person fulfills any of following conditions Government of India decides whether the person should be treat as Indian resident for the specific financial year;
- If a person stays in India for more than 182 days during financial year
- If the person stays in India less than 60 days during financial year or
- If the person stays in India for more than 60 days and less than 182 days or
- Has stayed in India for 365 days in context of 4 years prior of that particular year.
NRI’s have to file Income Tax Return if they have or have earned any sort of taxable income in India. NRI’s need to file income tax on if the income exceeds the limit of exemption, they have file income tax return on;
- Income received from Salary
- Income received from House Property
- Income received as Rent
- Income gained from Business or Profession
- Income received from Capital gains or from any other sources
Penalty & Interest: It is necessary for NRI to file income tax return to avoid the heavy penalty of Rs. 5000/- and Interest at rate 1% per month on tax payable (balancing) if the income tax return is not file before the due date or within the period from end of applicable financial year.
Due Date of Filing Return: An individual need to file return on or before 31st July for particular financial year. If NRI is performing partner of Company or Firm whose books of accounts are audited every year, the due date is 30th September. If the NRI failed to file Income Tax Return then he need to file belated return.
NRI are allowed for the deductions under 80C on Life insurance premiums, repayments of loans on buying or purchasing house property, tuition fees, on investments such as ULIPS, PPF, NSC’s, ELSS, interest on education loans, deduction on donations and many more.
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