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Are You An NRI? Five Income Tax Rules To Know

NDTV Profit Team | Last Updated: July 31, 2016 11:45 (IST)

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Taxability in India depends on whether an individual qualies for the NRI status for the year.
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Ten Things to Know
While Filing Income Tax
Return This Year

1 NRI has to pay tax on any

income that accrues or arises in
India
2 An NRI can't open a public
provident fund account
3 Once an NRI becomes resident,
his 'global income' gets taxed in
India

If an Indian citizen leaves the country for a job abroad or

as a crew on an Indian ship and spends less than 182
days in India in a year, he or she is considered nonresident for tax purposes.
Taxability in India depends on whether an individual
qualies for the NRI status for the year.

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Here are some of the income tax rules NRIs should know:

1) An NRI has to pay tax on any income that accrues or

arises in India or is received in India. So salary received in India, rental income, interest
income from xed deposits or saving bank accounts and capital gains on assets sold in
India are taxable. If the income of an NRI is more than the basic exemption limit for the year,
he or she is liable to le return in India. Also, to claim tax refunds, or to carry forward losses
to future years, NRIs have to le return.

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2) If an NRI returns permanently to India after spending a few years abroad, his/her foreign
income does not become taxable in India immediately. An individual, who has been a nonresident for nine consecutive years, remains RNOR (Resident but not Ordinarily Resident)
for two years for tax purposes, which is transitional status between being an NRI and
becoming a full-edged resident Indian. "Till the point of time a returning NRI becomes a
resident in India, according to Income Tax laws, which usually takes about two years - any
income earned outside India will not be taxed in India unless it's from a business or

http://profit.ndtv.com/news/tax/articleareyouannrifiveincometaxrulestoknow1437266

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7/31/2016

AreYouAnNRI?FiveIncomeTaxRulesToKnowNDTVProfit

profession controlled from India. Once, he is a resident, his 'global income' (which includes
income outside India as well) gets taxed in India," says Mr Maheshwari.

SBI,AssociatesMergerByMa
Bhattacharya

3) In this year's Budget, it was announced that TDS (tax deducted at source) will not be
deducted at a higher rate if an NRI without PAN can provide alternative documents. "Earlier

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the NRI had to pay the tax at the rate of 20 per cent or the rate in force whichever is higher

Jaw

in case the NRI doesn't furnish the PAN. As per the new provision, the NRI doesn't have to

PettyAndPosh

pay the higher tax if he doesn't furnish PAN and instead provides the documents specied
under the recently notied rules in this regard.," says Amit Maheshwari, managing partner of

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Ashok Maheshwary and Associates LLP.

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4) If an NRI returns to India and turns Ordinary Resident Indian for a particular year, then the
person will have to disclose all the foreign assets and foreign income in the tax return.

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There are stringent penalties under the Undisclosed Foreign Income and Assets Bill, 2015
for not doing so. Such income will henceforth not be taxed under the Income Tax Act but

Appurse

under the provisions of this new legislation on unaccounted money.

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5) An NRI can't open a public provident fund (PPF) account. But if the person already has a

Couture

PPF account before becoming an NRI, he or she can continue to operate the account, but
only till the period of maturity. At maturity, the NRI would have the option to remit the
proceeds in the country of residence and will not have the option of extension post
mandatory 15 years' lock-in period. In case, post maturity, the account is left unattended, it

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will be considered as "extended without contribution".

yourselectednews.com

Story rst published on: July 30, 2016 11:04 (IST)

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