Tax exemptions NRIs should note while filing their income tax returns in India?

Planning

oi-Sunil

By Sunil Fernandes

Published: Tuesday, May 20, 2014, 11:36 [IST]

Non Resident Indians (NRIs) have to pay income tax if their income is accrued in India or if their income is sourced from India and if the amount of such income exceeds Rs two lakhs. There are certain tax exemptions that NRIs must remember while filing their Income Tax Returns, so as to ensure they show correct income. Here are the few exemptions.

Interest on NRE Deposits and FCNR Deposits

Do not add interest earned on NRE and FCNR Deposits as they are tax exempt. However, interest earned on NRO deposits have to be added to the total income for determining tax liability. Read difference between NRE and NRO account here

Dividends from payment of ownership of shares and mutual funds are exempt

It's important to remember that dividends from equity shares and mutual funds are exempt, whether you are an NRI or a resident individual. You need not add the same to total income to compute your tax liability.

Long term capital gains on sale of shares and mutual funds

If you have made profits on the sale of equity shares or mutual funds by selling the shares or the units after holding them for more then one year, there is no capital gains tax that has to be paid.

Deduction of house tax paid, as well as 30% for repairs and maintenance

If you earn rental income in India, as a Non-Resident Indian you are eligible for deduction in respect of actual payment of house tax as also a special 30 per cent deduction is available towards repairs, maintenance and collection charges of the property.

Other deductions

You can claim deductions under section 80C for life insurance, PPF etc. Read more on the Section 80c benefits here.

Apart from that you can claim benefits on SEC 80D and donation made to approved charitable institutions.Read more here

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