3 Instances In Which An NRI Has To File Income Tax Returns In India

A non resident Indian for the purpose of Income Tax is one who has stayed outside the country for more than 182 days.

The often asked question by Non Resident Indians (NRIs) is: Should I file income tax returns in India? NRIs need to file income tax under the following circumstances.

1) If there is a tax refund for the NRI

Let's say that you invested Rs 2 lakhs in a Non Resident Ordinary (NRO) fixed deposit account. Now, if the interest rate is 8 per cent, you have earned Rs 16,000 as interest. There is definitely going to be a tax deducted at source (TDS) on this interest income.

Now, if this is your only source of income than as per law you need not file tax returns because your income is less than Rs 2.5 lakhs.

But, how would you get back the tax on the interest amount deducted by the bank. The only way you can get it back is by filing your tax returns.

2) If your income exceeds the threshold limit

If you are an NRI and your income from various sources in India exceeds Rs 2.5 lakhs, you are supposed to file your tax returns. This could be from various sources like income from house property, interest income etc.

3) Short or long term capital gains

If you are a NRI and have made a short or long term capital gains on assets in India, you have to file your income tax returns. For example, let's say you bought shares in India and sold them at a profit within a period of one year, then short term capital gains applies. You have to pay capital gains on such profits made. Similarly, for real estate that you may have bought and sold.

Conclusion

You have to be careful and make sure as an NRI you file your tax returns under the above conditions. After all it is income earned in India and you are liable to pay tax.

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