If you are a NRI who lives outside of India, you are probably wondering, “Do NRI pay tax in India?”. However, there are a few things that you must keep in mind. In India, you will be taxed on income that you earn, including interest and dividends. The rates for TDS for non-resident Indians are different than for resident Indians. So, make sure you have accurate records on your days in India.
In order to make this determination, you need to consider your annual time spent in India versus the year you resided abroad. If you’ve relocated in the past year, the process is more complicated. You need to spend at least 182 days outside of India in order to qualify as an NRI. If you’re planning to live in India for the long haul, consider acquiring an NRI residence tax status.
For example, if you’re an NRI living abroad, you’re allowed to claim a deduction of up to Rs 1.5 lakhs. You also can’t invest in some forms of securities in India. If you’re an NRI and want to take advantage of the Double Taxation Avoidance Agreement, you need to file a tax return. Once you have completed this filing, you’ll be able to claim your refund.
While the tax laws in India are complicated, it is not impossible to make your tax payments in the country of residence. The DTAA is a tax treaty between India and other countries that prevents taxpayers from paying double tax. The DTAA allows for tax exemption in one country and deduction at source in another. This means that an NRI who lives in the United States of America pays tax in the country where they earn their income. They subtract the amount they earn from their total income and apply tax to the difference.
Another way to make NRIs pay tax in India is through salary. Salary income is considered to be taxable income in India, even if it is earned abroad. If the NRI receives salary from a company in India, it will be taxed at the Indian slab rate. When the salary was rendered in India, it was considered to be earned in India and is taxed accordingly. A NRI who receives salary from a foreign country will have to pay tax in India on the entire amount.
Capital gains on the sale of assets acquired in India are taxable to an NRI. This is true for any transfer of Indian assets. This includes NRI house property. If the NRI sells the house property to a resident in India, the buyer must deduct a minimum of 20% TDS. The NRI may claim a 30% exemption on capital gains under section 54EC and if he sells it to an Indian resident, the buyer is responsible for the rest of the tax.
In other cases, the NRI may sell his/her property to an Indian citizen. The buyer pays the difference in price and pays the rest to the seller. The buyer must deposit the TDS amount with the Income Tax Department. This is because the seller must file Form 13 with the Income Tax Department. A chartered accountant can help a NRI with their tax filing. You need to file Form 13 with the Income Tax Department if you want to claim the refund of taxes.
