This article is dedicated to NRIs( Non Resident Indians).
First of all, do all NRIs know that they are NRIs in India? Probably its a NO for many. So, before heading towards knowing the concept of Tax return filing, let us first get an insight into who NRIs are?
Concept: The Income Tax Act, 1961 defines a non-resident Indian as an individual, being a citizen of India or a person of Indian origin, who is not a resident. A person is of Indian origin if he or either of his Indian parents or any of his grandparents was born in undivided India.
The status of a person as a resident or non-resident depends on his period of stay in India. The period of stay is counted in number of days for each financial year beginning from 1st April to 31st March (known as previous year under the Income-tax Act).
If an Individual satisfies both the below stated conditions, he becomes a non resident:
1. He is not in India for 182 days or more during the relevant previous year.
2. He is not in India for 60 days or more during the previous year and he is not in India for 365 days or more during the 4 years prior to the previous year
In the case of an individual on visit to India or a member of the crew of an Indian ship or a person leaving India for employment outside India, the requirement of stay in India of 60 days in condition 2 above is replaced by 182 days. It means second condition becomes redundant.
So, hope you are clear about concept of NRIs in India. Now, we move forward to our main concern i.e. Tax Return Filing by Non residents or a OCI/PIO.
When to file tax return?
Tax filing obligation arises in following cases:
If your taxable income in India during the year 2012-2013 was above the basic exemption limit of Rs 2 lakh.
OR There are short-term or long-term capital gains from sale of any investments or assets in India, even if the gains are less than the basic exemption limit.(Rs 2 Lakh)
There are various deductions entitled to all NRIs, which brings down the taxable income and total tax liability thereon. For more information wait for my next article on Deductions for NRIs.
What is the due date?
Due date for filing tax return is 31st July, following the financial year in which income is earned. So, for Financial Year2012-13, due date is 31st July 2013.
What if you missed the date?
I know what you guys are thinking right now. Oooops!
You missed the deadline this year.
There is a good news for you. You can still file your return without any penalty till 31st March 2014. Have a long deep breath and relax!!
If you have any tax payable and you missed the date, you can file it till 31st March 2014 by paying Interest of 1% per month for every month of delay starting from 31st July 2013 till the time you file your tax returns(which is not a big deal I guess).
Best way to get returns filed?
Now, after collecting so much gyaan (knowledge) you must be wondering, how to get our returns filed? In order to save your time and energy, you can hire a professional tax consultant that can be a Chartered Accountant or Tax Advocate dealing in International Taxes, who will provide you all the services including consultancy.
Some Additional points for consideration:
NRIs who have paid excess taxes or TDS has been deducted out of their income, can claim refund by filing taxes in India. So, its never too late to get the whole process started. File your return and claim your refunds. It is as simple as you having a cup of a Coffee.