Non-resident Indians or NRIs need to pay taxes in India under certain conditions while they are exempt in certain cases. Let us take a look.
Income Below Basic Exemption Limit
“NRIs whose total income (before availing any available deduction under Chapter VI-A (such as 80C, 80D, 80G, etc) and exemptions under Section 54 series such as Section 54, 54F, 54EC, etc.) exceeds the basic exemption limit of Rs 2,50,000 under old regime / Rs 3,00,000 under new regime, would be required to furnish their tax returns (ITR) in India on or before 31st July of the year after the end of the relevant financial year,” says Suresh Surana, a Mumbai-based chartered accountant.
As such, if an NRI’s total income earned in India is below these basic exemption limits, they are not required to file an ITR.
Income Solely From Foreign Investment In Foreign Exchange Assets Or From Long-Term Capital Gains Of Such Assets
“Non-resident Indians are not required to file a tax return if their income is exclusively derived from investments in foreign exchange assets, such as shares or debentures of Indian companies or from long-term capital gains from these foreign exchange assets. This is because The applicable taxes have already been deducted from this income,” says Madhupam Krishna, Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and chief planner, WealthWisher Financial Planner and Advisors.
The income of certain categories of individuals may also be exempt from taxes.
Non-Resident Sportspersons
“Non-resident, non-citizen sportspersons are exempt from filing a tax return if their income consists of earnings from participating in any game or sport in India (excluding lottery winnings and similar income under Section 115BB), revenue from advertisements or payments for contributing sports-related articles in Indian newspapers, journals, or magazines,” says Krishna. Taxes on these earnings are deducted at source.
Non-Resident Entertainers
Non-resident, non-citizen entertainers are exempt from filing a tax return if their income is earned from performances in India and taxes on this income have been deducted at source.
However, it may still be required for an NRI to file their income tax returns. “In certain cases where the NRI intends to claim Income tax refunds and/or adjustments, they would be mandatorily required to furnish their tax return,” says Surana.
