Our Role: We offer Professional Tax Services for NRIs,
PIO, OCIs and Companies not registered in India. Indian
Income Tax Rules are not a cup of tea for everyone;
and if the person concerned is a
non-resident, understanding the same is definitely not a
cakewalk. For this very
reason, we, at NriInvestIndia.com,
give you few of the basic, but pivotal, guidelines for filing
tax returns online in India if you are a non-resident
Indian living abroad and want to learn more about
Indian taxation then you have come to the right
Before anything else, we would like to tell
all our non-resident clients that it is extremely important to
quote your PAN for being able to have any financial
transaction & file taxes.
At the outset, if you are a resident
Indian, about to take up employment abroad, the first task
before you is filing for an Income Tax Clearance Certificate
(Form 31), as per Section 230 (I) of the Income Tax Act 1961.
The Assessing Officer would provide Form 32 authorising the
If you are wondering how much of paperwork
you need to do before departing, then relax! You have to only
fill up Form 31. The IT Department does not require any other
information from you.
But if you
fall in the contrary sector, that is, if you are a
non-resident working in India, you HAVE to file tax returns
for as per IT rules, any income earned anywhere in the Indian
territory is taxable. Please note that non-residents do not
have to pay tax IF the same has been deducted at source.
At the same time, if you are a non-resident
living in India, but if your income is being earned by you
from anywhere OUTSIDE the Indian Territory, you DO NOT need to
pay tax. As stated above, only those incomes are taxable that
is generated from within the Indian Territory.
Coming to stocks, if you are a non-resident
selling stocks you are not chargeable. However a resident
Indian has to comply by the tax guidelines and pay tax.
'Do I have to pay tax in GDR and ADR of an
Indian Company'? This is a question we often frequent. The
answer to this depends on your residential status. GDR and ADR
are foreign securities, and so non-residents need not pay tax
on the same.
Are you happy that being a non-resident you
have so many benefits vis-a-vis payment of tax? If yes, then
think again for if you are a non-resident investing in the
Indian Share Market, you NEED to file tax returns, as the
income you thus earn is from within the Indian Territory. The
same holds true in the case if you are a non-resident working
in India (say as a consultant). As your salary is coming from
within the Indian Territory, your salary is taxable.
Are you a non-resident coming back to your
homeland? And you think you will have to pay tax upon arrival?
You can stop thinking in this case. You DO NOT have to pay any
kind of tax whatsoever as your savings is from income earned
and received abroad.
do not have/share a Double Taxation Agreement with other
countries. India is no exception. Thus in such cases, certain
deductions are allowed based on proof that tax has been paid
in the resident country.
We also get queries from people who are
resident Indians but are working abroad on a short-term
assignment. They often ask whether they have to pay tax, as
they are not non-residents yet their income is not generated
from within Indian Territory. Well, all of you, who come in
this category, the answer to your question is YES. Since you
are a resident Indian, you have to pay tax. For technicians
(these include individuals working on construction,
manufacturing, mining, power generation etc, agricultural
activities, public administration and business management,
accountancy, applied sciences, and social sciences) a
deduction of 75% is applied within six months at the end of
the financial year under Section 80RRA. The rest of the
allowance is taxed at a marginal rate.
If you are an Indian deployed outside by
your Indian company, your salary/allowance IS taxable. Here
too technicians are permitted to facilitate 75% tax deduction
benefits under Section 80 RRA, within six months at the end of
the financial year. The remaining 25% income is taxable at a
We would like to conclude at good news J If
you are a non-resident returning to India, you DO NOT have to
pay tax for seven successive years on money and assets
acquired a year before your return to India. To top it, your
NRE Account is also exempt from tax in India.
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