In this video, Abhinav is sharing finer details of situations when NRI needs to file tax returns in India.
Video transcript below (kindly note auto transcription can contain errors):
Hello, and welcome. This is Abhinav, and, I welcome you. In this video, I’m sharing, information on, when an NRI needs to file a tax return in India. Right? So a lot of NRIs have this question that, they are nonresident, but are they required to file a tax return in India?
So let us take other situations when they need to file the tax return. So number 1 is that when their total income in India, before any deductions or exemptions for long term capital gain, is above the exemption limit of 3 lakhs. Right? 3 lakhs is as for the new tax, regime, which is from this year, financial year 23-24. It is like the default tax regime.
Or, otherwise, if you opt for the old tax regime, then it is 2.5 lakhs. So if the income before any deductions, exemptions, it is above 3 lakhs. If it is above 3 lakhs, then you need to file a tax return. In India, it is mandatory. Now many, NRIs think that this is the only condition.
If the income is below 3 lakhs, then you don’t need to report. Then you don’t need to file a tax return. No. That is incorrect. I’m coming to more situations.
Now if your deposit in savings bank account is more than 50 lakhs or a current account more than 1 crore. Right? If your deposit in a savings bank account more than 50 lakhs, current account more than 1 crore, then also you need to file a tax return. Now will the savings bank or current account means also an NRE a narrow account? Right?
For example, you credit, like, more than 50 lakhs of your income earned outside India into the, maybe you could remit it to the, NRE account more than, like, 60 lakhs. Will you be will that fall into this? In my view, yes. It’s a subtle gray area. Right?
In my view, it is yes because by savings bank account or current account, it also includes NRE and our accounts. What are NRE and our account? They are just basically the accounts that are Indian account that are redesignated to, nonresident accounts just because the person has become an NRI as per the FEMA. Right? So they retain their character as an Indian SB accounts, and the in my view, the in in that instance, it, the tax filing requirement will get triggered in India.
Right? Then foreign travel. If you spend on any foreign travel more than 2 lakhs. Right? If you spend, like, for from India, you make a payment for any foreign travel for more than 2 lakhs, you need to file a tax return in India.
Then if you there is an electricity consumption. So if you have an Indian home and there’s an electricity consumption, the electricity bill is more than 1 lakhs, right, which is like 8,000 or more per month or something like that, then you need to file a tax return. Then turnover of the business. If you have a business in India and the turnover of that business is 60 lakhs and above and or if you have a profession in India and it is more than 10 lakhs then you need to file a tax returns but anyways if you talk about turnover from business or profession in India then anyways it will come Your total income in India will cross that particular I mean, I’ll I mean, that thing will get triggered, so it will, anyways, qualify. Then important thing is that if you have a TDS or a TDS or a TCS of more than 25,000, right, so this is 25,000 is a very, very small kind of a case.
So if that kind of a thing is there, again, that will trigger a tax filing requirement in India. Then if you in claim income to tax on special rates, so if you claim certain special rates for your investment income in India, a nonresident can claim certain special rates, then basically the taxation on those special rates is basically starts from rupee 1 only. There is no such exemption limit that you get. So in that case, you’ll have to file a tax return in India to claim that special rate. Then in some optional cases, if you have, like, a carry forward of loss, you cannot carry forward the loss, if you don’t file a tax return.
So in that case, you’ll have to claim, or if you have to claim any TDS or TCS, for example, if you have a TDS that was deducted, for example, you had NRO, deposits in your NRO account and a flat 31.2%, TDS has been deducted or you want to take a claim of that TDS or of TCS, then then you need to file the tax return to take a claim of those things. Now if you don’t file a tax return, there are no as such a filing consequences. Right? There are there earlier there was a penalty, but now there is no such penalty as such of non filing of the tax return. However, it can lead to information notices from the income tax department, and this is generally what happens.
Like, for example, if you have significant I’ll make a separate video on transactions which can trigger a tax notice. Right. So if you have, like, big credits in your accounts in India or if you have some big investments that you have done, like, more than 30 lakh, you have bought a property or something. Right? So then what happens is that the information gets reported to the income tax department.
So against that reporting of information, they will see now everything is basically all the data and this thing happened. They see against this particular plan for whom, like, TDS has been guilty of 50,000, whether the person has filed a tax return in India. So if the person has not filed a tax return in India, there is this information inquiry notice that comes that we have not been able to see a tax return that you have. Although there is no taxable income or the taxable increase is less than the exemption limit, still just because the person has not filed a pan the tax return in India, it can be there can be information. It’s not a tax demand.
They want information why you have not filed. So that that definitely is a possibility. If you have Indian investments, Indian assets, or Indian transactions, it’s always better to file a tax return. So my opinion is that if you if you are a nonresident and you hold a pat and you have any Indian financial interests, Indian investments or Indian assets or a home in India or you want to buy any home or any investments in India and you have a pat in India, always, always, always please do file a tax return in India. It’s always advisable.
It ensures continuity. It saves you from the hassle of replying to the tax notices, non filing tax notices. Right? In every way, it is better spend a few 1,000, get a tax return filed in India, and that’s the right approach in my view so I hope this video was helpful if you have any questions do share it in the comments section thank you so much for watching this video thank you so much