ITR filing: Receiving income from India? Here's what an NRI needs to do

Income Tax Return filing dates are appearing closer with each passing day. 

ITR filing process is considered as little complex, and if you are a non-resident Indian (NRI) the process will be different all together. 

Here we bring you a simple guide for NRIs to file ITR. 

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Residential status

Chetan Chandak, Head of Tax research, H&R Block India, said that first of all for taxpayer, they need to determine residential status. 

An Indian Resident is a person, who meets the following conditions in a financial year:

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Firstly, he is in India for at least 6 months (182 days to be exact) during the financial year or, he is in India for 2 months (60 days) for the year in the previous year and has lived for one whole year (365 days) in the last four years.

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Secondly, only the first condition is applicable to you if you are an Indian citizen going for work abroad or a member of a crew on an Indian ship. So, if you do not meet any of the above mentioned conditions, then you are an NRI.

Thirdly, in case if you become resident of India by applying the above conditions then you can further check whether you qualify as Not Ordinarily Resident of India (R-NOR). In case if you have been in India for less than 730 days in preceding 7 financial years or if you qualify as Non-Resident in 9 out of 10 preceding financial years then you can claim this special status of R-NOR.

Conditions when NRIs have to file ITR in India

Archit Gupta, Founder & CEO ClearTax gave five situations when an NRI needs to file ITR in India. Firstly, they receive salary in India or someone on their behalf does that. Salary income received directly in an Indian account is subject to tax in India. Secondly, they earn income from a property that is situated in India. Even if the income, like rent, goes directly to the NRI’s foreign account, it is taxable in India because the property is in India.

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Thirdly, they receive interest income from fixed deposits and savings accounts in Indian banks or interest from FD is accrued. Fourthly, they earn an income from a business that is controlled or set up in India. Lastly, they make capital gains on transfer of capital assets that is situated in India.

Moreover, Gupta mentioned that there is Double Tax Avoidance Agreement (DTAA) that NRIs can use to avoid getting taxed in two countries. India has DTAA with many countries and NRIs in those countries can claim tax relief by using either the exemption method or tax credit method. Relief under DTAA has to be taken in the foreign country of residence, not in India.

Process for filing ITR

For filing tax return you can go to the Income Tax Department portal of India. Then select ITR 1 or ITR 4, fill the form and upload all the required documents or download ITD utilities for the relevant ITR form (1-4) and then fill up and upload it on the website through your web log, Chandak said. 

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However, if you do not want to go through these hassles, then there are few very good online tax filing portals available to you. You can choose any of them. Just provide your personal information needed to file your ITR and submit the required documents, the tax advisors will take care of the rest.

Documents required

NRIs need the following documents for filing tax return:

• Passport for calculation of residential status
• Form 16 in you worked in India for some period during the year
• Bank Account – NRE/NRO Account statement if any
• Interest certificates/ form 16A
• Details of Rental Income and TDS on it
• Capital Gain Statement (for sale of share/MFs/ securities)
• Details of any other income earned in India
• KYC Information – Name, Date of Birth, Fathers Name, Bank Account number, IFSC Code, PAN Number, Address

Hence, NRIs don't wait for the last moment and start filing ITR now!