A Guide - Filing of Income Tax Returns (NRIs)

A Guide - Filing of Income Tax Returns (NRIs)

The last day for filing Income Tax Return for the financial year 2010-2011 is 31st July, 2011. We don’t know whether Government will extend this date. Any way consider 31st July as the last day. The following are the brief guidelines of how to prepare and file the tax return of Non-Resident Indians (NRIs). This is only general information just to give you an idea about the tax return preparation and filing. Usually, you could file your return either by giving a power of attorney (POA) to someone in India or by sending your form and tax related documents/ supporting to your tax consultant in India who would then file returns on your behalf. But nowadays, the easiest option for NRIs to file their Indian tax returns is by using the online platform. There are several options to file online. Visit Income Tax Department website itax this website allows you to efile your return. But the process maybe a bit difficult. You would need to download software, fill in your details and upload an XML file. You would then need to print and send a copy of the acknowledgement (known as ITR-V) to the tax office in Bangalore within 30 days. You can do this for free.
Who are all liable to file Tax Return?

An NRI is liable to file his/her Income Tax Return for the financial year 2010-2011, if any of the following conditions are fulfilled.

a) NRIs taxable income in India during the year 2010-2011 was above the basic exemption limit of Rs 1,60,000.00 (Rupees one lakh sixty thousand) or

b) You have earned short-term or long-term capital gains from sale of any investments(Mutual Funds, Equities, Bonds or capital assets like land, building, house etc) even if the gains are less than the basic exemption limit of Rs. 1,60,000.00

Please note that, the enhanced exemption limit for senior citizens and women is applicable only to residents and not to NRIs.


Exemptions to file tax returns

Your are not required to file Income Tax Returns, in case you earned long term capital gains from the sale of equity share listed in on the Stock Exchange (Eg. NSC, BSE etc) or equity mutual funds (provided Security Transactions Tax STT tax has been deducted from the sales proceeds). In this case you do not have to pay any tax and therefore you do not have to include that in your income tax return. Also, you are not required to file Income Tax Returns, If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income and your total income does not exceed the basic limit. Suppose, in case you wish to claim the refund from the Income Tax Dept for the tax deducted but your total income is less than the basic limit (Rs.1.6 lakh), you need to file the income tax return. Another case is when you have a capital loss that can be set-off against capital gains in such cases; you would need to file a tax return.

What is the time limit to file tax return

The last date to file returns for the financial year 2010-2011 is July 31st 2011. However, remember the following:

a) 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 2012 without any penalties

b) If you do have tax payable, you can still file your returns by 31st March 2012 but you will be charged an interest of 1% per month for every month of delay starting from 31st July 2011 till the time you file your tax returns

c) If you do not file your tax returns even by the 31st of March 2012, you may be charged a penalty of Rs 5,000 for every year of delay.

This article is only for general information; please consult your Chartered Accountant, Tax Consultant or Legal Adviser for more information and guidance. Please note that, most of the provision described above is applicable to resident tax payers also.