Online Income Tax e-Filing Portal | NRI Taxation
Taxation is a necessary aspect of personal finance, it does not matter whether you are a Non-Resident Indian or NRI or an Indian residing in India. When you get into the details, tax rules are different for Non-Resident Indian. The important thing is you don’t have to come to India to file your income tax returns.
Determining your residential status
Before knowing about taxation, first, let us discuss know qualifies as a Non-Resident Indian. The Foreign Exchange Management Act or FEMA has laid down some rules to determine if an Indian origin citizen is an Indian resident or NRI.
If you are a resident of India for tax purpose if:
- You stay in India for at least 60 days of a year in the past year and at least for a year in the preceding four years
- You have lived in India for at least 182 days during that financial year.
Taxable income for NRIs
The Non-Resident income tax can be levied on the following rules:
- Interest on Bank Savings Account
- Salary received for services offered in India
- Rental income from property if you have any owned in India
- Capital gains earned on the assets transferred located in India
- Revenue from fixed deposits
Tax deductions available for NRIs
A non-Resident of India can avail the tax deductions under section 80C. Presently, Current deduction allowed is Rs.1.5 lakh for tax deductions under the Section 80C
Deductions under Section 80C
- Life insurance premium payment
You can declare tax deductions on your life insurance premium instalments if the policy is in your spouse’s, your name or child name. Also, the premium should be less than 10% of the sum assured for the deduction.
Repayment on loan for the property purchase in India
Repayment or EMI instalment on a loan taken for construction or acquisition of a residential property is eligible for deduction. It includes stamp duty, registration fees as well as other expenses.
Children’s tuition payment
Tuition amount paid to an educational institution like college, university or school for full-time education for your children eligible for deductions.
Investment in ELSS
Investments in ELSS or Equity-linked savings scheme from Mutual funds up to Rs. 1.50 lakhs can claim for deduction under Section 80C
Deductions under Section 80D
Being an NRI, you can declare a deduction on premium instalment for health insurance under Section 80D of the Income Tax Act,1961. It is available for a premium amount up to Rs 25,000 on insurance paid on a dependent spouse, children or self. If you are a senior citizen then amount get increased to Rs.50,000.
How to avoid double taxation
Double taxation is claimed when income tax is paid twice for the same source of income. It is common for NRIs to earn income in two countries.
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