The tax rules for NRIs are totally different from those who are residing in India. For paying the tax and to get the best benefit out of the same, one must understand well the tax rules first. A lot of confusion is there with regards to the tax rules for NRI and this is a reason why people end up with false information. To help the NRIs in this concern there are many NRI tax service company. In this informative article, we are going to highlight about the tax rules for the NRIs according to which they are supposed to pay tax in India.
- Salary received in India or salary for service provided in/from India. The NRI is taxed according to the tax bracket they fall in.
- Income from a house property situated in India. The property may be rented or lying vacant and tax will apply as per prevailing rates. Also, if the property is rented the tenant has to deduct 30% as TDS before making a payment to the NRI.
- Capital gains on transfer of assets situated in India. Capital gains on investments in the country in shares, securities shall also be taxable in India.
- If you sell a house property and have a capital gain, the buyer shall deduct TDS at 20% for long-term gain and at 30% for short-term gain.
- Income from Fixed Deposits or interest on Savings Bank Account
- Interest on NRO account is taxable for an NRI and the bank will usually deduct taxes at 30%.
- Any income earned by an NRI from a business controlled or set up in India is taxable to the NRI.
- Any gift in excess of 50K per annum received in India from a non-relative.
Those incomes which are not taxable in India include:
- Income which is earned outside India is not taxable in India.
- Interest earned on an NRE account and FCNR account is tax free.
While all individuals who have an income exceeding 2.5 lakh are required to file taxes, NRIs can benefit from filing their returns especially if they want to claim a refund or they have a loss that they want to carry forward.
Just as NRIs may be taxed like other Indian citizens, they can also enjoy the rebates and deductions provided for under Section 80 of the Income Tax Act. Thus, student loans, charitable donations etc will all enable the NRI to claim tax deductions. Contacting a good NRI tax service company would also provide fruitful result.