FAQ

Requirement of Filing Tax Returns in India by Non-Residents

Do non-residents need to file income tax returns in India?

Yes, non-residents are required to file income tax returns in India if they have income earned in India that exceeds the basic exemption limit or if they need to claim any refunds. This includes income from sources like salary, rental income, capital gains, and business income derived from India.

What are the criteria for non-residents to file tax returns in India?

Non-residents must file income tax returns in India if:
They have income from India (such as salary, rent, capital gains, etc.) that exceeds the exemption limit.
They are eligible for a refund of taxes (e.g., excess TDS has been deducted). They have capital gains on the sale of assets (like property or shares) in India. They wish to claim any deductions (such as under Section 80C) for tax planning purposes.

What is the income threshold for non-residents to file tax returns in India?

For individuals, the basic income exemption limit is typically:
         ₹2.5 lakh for individuals below 60 years of age.
        ₹3 lakh for individuals between 60-80 years (Senior Citizens).
          ₹5 lakh for individuals above 80 years (Super Senior Citizens).
     If a non-resident earns income above these limits from India-based sources, they must file a return.

How does non-resident income get taxed in India?

Non-residents are taxed only on their income earned in India, such as:
        Salary income from Indian employers.
        Rental income from properties in India.
        Capital gains from the sale of assets in India (immovable property, shares, etc.).        Interest income from Indian banks or other financial institutions.
This income is subject to TDS (Tax Deducted at Source), but if excess TDS has been deducted, the non-resident can claim a refund by filing an income tax return.

What types of income require non-residents to file tax returns?

Non-residents must file tax returns for anyincome that is:
            Earned in India: This includes salary, rental income, interest income, and capital gains from Indian assets.
              Received in India: If income is remitted to India, it is considered taxable in India and must be reported.
              Subject to Tax Deducted at Source (TDS): If taxes are deducted at source, but the non-resident’s total tax liability is lower than the TDS, a return must be filed to claim a refund.

Cana non-resident claim deductions under the Income Tax Act while filing returns in India?

Yes, non-residents are eligible to claimcertain deductions under the Income Tax Act while filing their returns,such as:
          Section 80C: Deductions for investments in specified savings schemes, insurance, and pension funds.
            Section 80D: Deductions for insurance premiums paid for self, spouse, or children.
                Section 24(b): Deduction on home loan interest (if the property is in India).
However, non-residents cannot availthemselves of the tax-saving provisions related to income earned outsideIndia.

When should a non-resident file their tax return in India?

The deadline for filing income tax returns is typically 31st July of the assessment year (for individuals who are not required to get their accounts audited).

If the non-resident is required to get their accounts audited (e.g., business income), the deadline is usually extended to 30th September.

Can non-residents file tax returns online in India?

Yes, non-residents can file their incometax returns online through the Income Tax Department's e-filing portal.The process involves:

      Registering on the e-filing portal.
    Selecting the correct ITR form based on the income sources.
    Submitting the form along with necessary details about income and deductions.

What documents are required to file tax returns in India for non-residents?

Non-residents need the following documentsto file their tax returns:
    Form 26AS: A tax credit statement showing details of tax deducted at source (TDS).
     Bank statements: To report interest income and other financial details.
     Income details: Such as salary, rental income, capital gains, etc.
    Form 15CA/15CB (if applicable): Required when remitting funds abroad.
     Proof of deductions: Such as investment documents under Section 80C, medical insurance under Section 80D, etc.

Donon-residents need to file a return if they have only received income in Indiathat is subject to TDS?

If a non-resident’s income is subject to Tax Deducted at Source (TDS), and the TDS amount is correct based on their total income, they are generally not required to file a tax return. However, if excess TDS has been deducted, the non-resident can file a tax return to claim a refund.

What is the penalty for non-residents who fail to file tax returns in India?

If a non-resident fails to file their tax return on time, they may be subject to:
                    Penalties under Section 234F, ranging from ₹5,000 to ₹10,000.
                    Interest under Section 234A for late filing.
                    Prosecution and further legal action in extreme cases of evading taxes.

Can non-residents file their tax returns after the due date?

Yes, non-residents can file their returns after the due date, but there will be consequences such as:
               Late filing fees under Section 234F.
               Interest for late payment of taxes (Section 234A).
               Loss of certain exemptions and deductions that are time-bound.

Is there a requirement to file tax returns if the non-resident has no income in India?

If a non-resident has no income earned or received in India, there is no need to file tax returns. However, if there is any income earned in India or taxes deducted at source, they must file the return.

Can a non-resident claim a refund of TDS deducted on income in India?

Yes, if excess TDS has been deducted on income, a non-resident can file a tax return in India to claim a refund. They can also claim deductions if applicable, reducing their tax liability.

Is it mandatory for non-residents to file a return if they have capital gains on the sale of assets in India?

Yes, non-residents must file a return if they have capital gains from the sale of assets (such as property, shares, etc.) in India. The capital gains will be subject to TDS but must be reported on the income tax return. They can claim any deductions or exemptions applicable, such as Section 54 (for long-term capital gains on residential property).

FAQ – Requirement of Filing Tax Returns in India by Non-Residents

Requirement of Filing Tax Returns in India by Non-Residents

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