Income taxes and refund for NRI

Income Tax on NRI

Income taxes and refund for NRI
Income Tax on NRI

Being a NRI (Non Resident Indian) is fun. NRI, have to pay Income tax as per  law of respective countries where you are residing. But there are certain incomes for which NRI’s have have to pay Income tax in India.

FAQ’s on NRI (Non Resident Indian) and queries on Income tax on NRI is addressed below:

Que: I am an NRI for last 5 years, and I am earning rent from property that I have let out in India? Do I need to file Income Tax Return in India? Mohit, Italy

Ans: If you have given a House property on rent, you can claim an adhoc deduction of 30% of net annual value as repairs and maintenance expenses. You can also claim a deduction on interest on Housing loan.

You don’t need to file income tax return if your Income is less than Maximum exemption limit. For year 2017-2018, Income Limit is Rs 250,000/-.

Que) My status is NRI and during last year i have earned certain Interest from my bank in India and Bank has deducted TDS on Interest. How can I Claim Income Tax refund on the TDS so Deducted? Kishan, Australia

Ans) For claiming Income Tax Refund, you will be required to file Income tax return in ITR form 1 and due date for filing  tax return is 31st July.

We can also assist in filing your Income tax return and getting Income tax Refunds. Visit here for filing your Income tax Return.

Que) How can assist me in Getting Income tax Refund? Sumita, America.

Ans) We can assist in filing Income tax Return.

Within 2-3 months Income tax refund Amount will be credited in your Saving Bank Account.

Que) I have made some sales in shares during the year and I have earned some profits. My only Income in India is capital gain from shares. Being NRI do I Still Require to file Income tax return in India? Hanish, London

Ans) Income tax Return need to be filed for both Long term and Short term capital gain for sale of investment or other assets even if total income is below exemption limit.

NRI’s don’t get benefit of Exemption limit on basis of age or gender that is available to resident Indians.

Income tax rate for Short term capital gains on equity shares and equity mutual funds is 15% and long term capital gains on securities and assets where tax rate is either 20% or 10% without indexation.

Que )  Which Income are exempt from Income tax for NRI’s? Divya, Singapore

Ans: Following Incomes are exempt for NRI’s.

  • Dividends from equity shares and equity mutual funds is tax free in India
  • Interest received on the NRE account and FCNR account is tax free
  • Long term capital gains on equity shares and equity mutual funds, that is capital gains from sale after one year of purchase, are tax free in India (provided you pay securities transaction tax at time of sale)
  • Income from interest on National Saving Certificate VI/VII issue and notified bonds purchased by you in foreign exchange.

This mean, even if your earnings from these Incomes is more than maximum exemption limit , you don’t have to file Income tax Return.

Que) I have got gift from My Mother and I am an NRI. Do i have to pay tax on Gift ? Shruti, America

Ans: There is no income tax on gifts received from your parents or close relatives. Visit here for more details on Income tax on Gifts.

Que: My Status is NRI and I have got only interest Income from Bank In India and TDS is already deducted. Do I still need to file my Income Tax Return? Rahul, Canada

Ans) Section 115G states that Income Tax Return not to be filed by a non-resident Indian under sub-section (1) of section 139  if—

(a) his total income in respect of which he is assessable under this Act during the previous year consisted only of investment income or income by way of long-term capital gains or both; and
(b) the tax deductible at source ( TDS) under the provisions of Chapter XVII-B has been deducted from such income.

But you should file your Income tax return to get refund for TDS that has been deducted.

Que) What is last date for filing Income tax return . Is there any penalty for not filing Income tax return for NRI’s?

Ans) Last date for Filing Return is 31st July.

  • If you do not have any tax payable (that is all your tax has been deducted at source), you can still file your tax return by 31st March 2018 without any penalties
  • If you do have tax payable, you can still file your returns by 31st March 2018 but you will be charged an interest of 1% per month for every month of delay starting from 31st July 2017 till the time you file your tax returns
  • If you do not file your tax returns even by the 31st of March 2018, you may be charged a penalty of Rs 5,000 for every year of delay or sometimes may not be able to file your returns at all after 2018.

Que) Do NRI get Income tax deduction under section 80C ? Vidhi, Paris

Ans) You can take benefit of Section 80C for Investment made under section 80C  in – Schemes such as PPF, life insurance premiums, equity linked saving schemes, etc.  up to a total of Rs 1.5 lakh per annum.

Que) As a NRI will get Income tax deduction under section 80D ? Vidhi, Paris

Ans) You can take benefit of Medical  Premium under Section 80D.

  1. Health insurance premium in India for yourself or your dependents, you can claim a deduction under section 80D.
  2. If the health insurance is taken for your spouse and dependent children, you can claim a deduction of Rs 25,000 per annum.
  3. An additional Rs 25,000 is available as deduction on insurance premium paid on behalf of your parents.
  4. If either of your parents is over the age of 60 ( ie Senior Citizen), the additional deduction will be Rs 30,000 instead of Rs 25,000.

Que) I want to transfer remittances from Dubai to my account here in India? What is the Income tax implication on such transfer for Non Resident Indian ? Amit, Dubai

Ans) Since income earned outside India falls outside the purview of the IT Act, you cannot be taxed on remittances to India. So you can send money to your own accounts in India without any fear of attracting tax. You can utilize the money for any purpose you like.

When you are remitting money to India, you will not be taxed unless the transfer is compensation received against services in the country which then results in the amount being chargeable to tax for the recipient.

Que : My NRO account TDS has been deducted at source @30%. My interest income is 1 Lakhs Rupees ? Do I Need to File Income Tax Return?

A) As your total income is less than 2.5 Lakh Rupees you are not liable to file tax return. (See Income tax slab)

You should file Income tax Return to claim Income tax refund for TDS of Rs 30,000/- deducted. While filing return,  make sure that you put correct bank details such as account number and IFSC code of the branch as refunds are processed electronically.

See more on filing Income tax return for NRI

Que) What are the tax implications for an NRI looking at selling his property in India?

A) If the property is more than 3 years old, long term capital gains tax will be incurred on the sale of the property. On long term capital gains, tax is payable @ 20%. However, tax can be minimised by making alternative investments in India.

Visit here How to Save Income Tax on sale of House Property for NRI

Que) Can NRIs  also claim exemption by investing the amount of capital gains in bonds issued by the National Highways Authority of India (NHAI) or Rural Electrification Corporation (REC) in case of Profit from sale of property which is long term?

A) Yes Investment in the specified bonds is to be made within six months of such sale and there is a lock-in period of three years for such bonds.

Que) I am a NRI living in US. Can you please advise me if long term capital gains tax are payable on sales of shares purchased by paying STT, and if it is exempt is there a limit?

A) LTCG on sale of shares is fully exempted on sale of listed company shares, purchased by paying STT, provided the transaction is long-term. i.e that share are hold for period of more than 12 months.

Que) I am working for a company based in America. Company doesn’t have any offices in India. My salary is transferred to bank account in India. I am paid in dollars , remittance is send in my bank account is converted by my bank from dollars to rupees.  I am also getting FIRC certificates from the bank whenever my salary is credited to my account. Please advice , do I need to pay income tax. 

A) Since you status is resident of India, you are required to pay income tax for all income you earn. You need to file income tax return and pay taxes accordingly.

Since your company would not be deducting income tax , you have to calculate income tax (as per income tax slab) and pay advance income tax .

Download Income tax calculator to calculate income tax liability.


17 responses to “Income Tax on NRI”

  1. nitin Avatar

    I will be resident and not ordinary resident in india for the FY 2013-14. I have fixed deposits in NRE a/c in Rs which i made when i was NRI last year. Should i be taxable for interest on NRE deposits even if i am resdient and noR.

  2. Pinky Kasotia Avatar
    Pinky Kasotia

    I am an NRI residing in the USA. Every year I am facing a problem of getting my refund credited to my bank acount (ECS) as I am informed that my refund amount is larger than Rs. 50,000. My house in India is not occupied and locked. I have no relative who I can entrust this work. All my sources are helpless because my refund is posted by SBI to my India address and the post intimation lies there and then the refund cheque goes back. Is there a way out for my every year problem?
    I had authorised my Chartered Accountant to collect the refund for me but he is helpless because the post office refuses to give my refund envelope to him unless he produces the postal intimation.
    Please help.

  3. Tatarao Kolla Avatar
    Tatarao Kolla

    Dear sir ,
    This is very useful for NRI s. I forwarded the same to my daughters


  4. vishwas Avatar

    I am working for Dubai base company and my job is like one month in
    India and one month out of India. i have an NRE account in Indian Bank, my company depositing my salary in USD in my NRE account. My question is “I have to pay TAX or Not”. Please help me.

    1. Tax Dost Avatar
      Tax Dost

      You need to pay tax and add your both income in case your status is Resident of India.

      1. vishwas Avatar

        thanks Tax dost,
        i am always getting my salary in USD (India or out of india). how i can know that, my status is resident or NRI because it is my first time for working in this company. Is any online provision for this to my resident check status. My company is telling that my salary is Tax free. I am ready to pay tax (FY2013-14, AY 2014-15) but If i could not able to pay Tax before 31 June 2014 then can i pay this before 31 march 2015 without any pennalty.

  5. Narendra Avatar

    I am an Indian and working in abroad. Do I need show my remmitance in ITR? If yes then under which section? How can I show my income in IT file? And who will give the income certificate?
    For ex. if I apply for a loan then how they will validate my income?


    1. Tax Dost Avatar
      Tax Dost

      There is no need to show your remittance in your tax return . You only need to show income earned in India in your Tax Return.

  6. Rajesh Patel Avatar
    Rajesh Patel

    i am NRI and resides at USA I am pensioner of SBI and they deducted tax from my pension every year, and there are some Fixed Deposite in SBI which are given by my parents for me and my brother and sister which are in my name because my brother and sister both are NRI and they doesn’t have Bank’s Account but Bank deducted TDS on them and i want to know i have to file returns of income tax in india and how can you please explain me in details.

    Thanks Raju Patel

    1. Tax Dost Avatar
      Tax Dost

      Please use Income tax form 1 and show your income from pension and interest income.

  7. Ravinder Avatar

    I am NRI and resides at USA. I am pensioner of AP state Gov. and they deducted tax from my pension every year. I am paying LIC premiums every year from my pension. Can LIC premiums payments be deducted from my net salary.

    1. rahul301 Avatar

      You will have to file income tax return to claim LIC premium benefit under section 80C.

  8. Sanjay Sharma Avatar
    Sanjay Sharma


    I am an Australian Citizen and looking to move back to India. However, I will retain my Australian citizenship.

    My question is how would I be considered for Tax purposes. And if the tax slab is same for oversees citizen as well.


    1. Tax Dost Avatar

      Your Tax status will be determined by your residential status. If you status is resident Indian, then income earned (across India+ or australia) will be taxable here in India.

  9. Sandeep Shenoy Avatar
    Sandeep Shenoy

    I am having US and Indian Citizenship. If I invest in Insurance Policies in India, what will be the tax implications at the time of maturity. Is is taxable

  10. Jignesh Rathod Avatar
    Jignesh Rathod

    i live in USA and i have taken loan to help my family member in India. they just used my salary slip to get the loan. On paper i am the primary loan holder. but my fmaily is taking care of loan premium. As I used my USA salary slip, they want loan premium to be deducted from my NRO acct. My family is depositing loan premium amt in my NRO acct and it gets deducted by Lender bank. I came to know that whatever amt my family is depositing in my NRO acct is being treated as my income in India so I need to pay taxes on that. Is it true? Kindly reply ASAP on this. I am not getting any answer form bank on this.


  11. s k darbari Avatar
    s k darbari

    my daughter is nri living in australia having PR status. she has investesd in birla sun life[BSLI Vision life income plan] 10000/- per month for 15 years to pay and
    Edelweiss Tokio Life Gcap 15000/- per month for 7 years to pay in the month of march 2016.The returns on these policies are tax free. now my question is what will happen if my daughter opt for australinan citizenship which she will likely doing so next year ie 2017.