NRI Tax Return- Various Incomes to be reported

Unlike Residents whose Income from Indian source as well as global source is taxable in India, in case of NRIs, only income from Indian source is taxable.

Accordingly, while filing NRI Tax Return in India, we need to only consider those incomes which has been received in India or accrued or arise in India.

In this write up, we will discuss about various sources of income of NRI which need to be reported while filing Income Tax Return in India.

1. Interest on NRO and NRE account

Normally, NRI/PIO maintains two types of bank accounts in India i.e NRO account and NRE account. Interest income received from NRO account is taxable and banks deduct TDS on same. Interest on NRE account is exempted from tax. While filing Income tax Return, NRI need to report both types of income in his ITR.

2. Rental income from immovable property in India

Any income received by NRIs from property given on rent in India would be taxable and would form part of NRI Tax Return Filing. TDS deducted on such rent can be claimed as refund in Income Tax Return.

3. Income from sale of Mutual Funds, Shares

Any income or loss incurred by NRI from sale of mutual funds or shares need to be reported at time of Income Tax Return filing in India. Further, like Residents, they are also entitled to carry forward the losses and set off against future income.

4. Income from sale of immovable property in India

In case of sale of any immovable property held by NRIs in India, capital gain or loss arises. NRIs are required to report such income or loss at time of ITR filing. On capital gain, necessary taxes would be required to be paid. Further, capital loss would be allowed to be carry forward to be set off against future income. Also, NRIs can repatriate sale proceeds out of India after paying necessary taxes and filing of form 15CA and 15CB from Chartered Accountants.

5. Income received in form of Dividends

As per recent amendment, any income received by NRIs in form of dividend from shares and mutual fund would be taxable in the hands of NRIs. Previously, it was taxable in the hands of company. Further, in case companies are paying dividend in excess of Rs 5000, it is liable to deduct TDS on same. Credit of such TDS can be claimed at time of NRI Tax return filing.

6. Interest Income From Bonds

Any interest income received by NRI from investment in bonds including Bonds under Capital Gain Saving scheme would be taxable in India and would form part of Income Tax Return filing in India.

7. Income from Insurance Policy Redeemed

At time of redemption of any insurance policy on which NRIs has made an investment, insurance companies deduct TDS. NRIs can claim credit or refund of such TDS by filing ITR.

8. Any Other Income

Besides above, in case NRI has earned any income which is not mentioned above, same needs to be reported while filing tax return in India.

Thus, from above, it may be seen that although NRIs are not liable to pay tax on income received or earned outside India, however, it need to report all such incomes which has been earned or received in India while filing NRI Tax return in India.

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