File ITR for NRI- Documents, Return Forms & Slab Rates

Many of the individuals have confusion that filing ITR for NRI (Non-Resident Indian) is compulsory or not? Some of them are not aware about the process, documentation of filing ITR for NRI. Through this post we will discuss all the important points related to ITR.

A non-resident, simply speaking is a person who spends most of the year outside India for work, residence, education or any other reasons. The following criteria defines an Individual status as a non-resident in India:

1. If a person has stayed in India for less than 182 days during the financial year, or

2. If a person has stayed in India for less than 60 days in the financial year and less than 365 days in the four preceding financial year.

We all need to understand that it is compulsory to file ITR whether you are NRI if your income exceeds more than threshold or exception limit. We have mentioned the tax slab rate in India for non-resident of India-

Old Tax Regime

New Tax Regime (Section 115BAC)

Benefits of Filing ITR for NRI

1. Legal Requirement: - It is obvious that filing ITR is a legal requirement for NRIs in India, as per Income Tax Act, 1961, not filing ITR will result in penalties and fines.

2. Avoid Tax Evasion: - NRIs can avoid tax evasion with filing ITR, as it helps them to report their income and pay application tax as per law.

3. Maintain Records: - It helps in maintaining their record of income, which plays important role while applying for loans, visas, and other purposes.

4. Claim Refunds: - In case you have paid more tax than you are required to pay, in that case you can claim a refund by filing ITR.

5. Showing Financial Stability: - Filing ITR can help non-resident Indians to show their financial stability and help them to apply for loans and other financial instruments.

NRI Income Tax Return Due Date

In India the due date of filing income tax return for non-resident Indians is 31st July of every year, in which income is earned. It is also important to remember that the due date of filing ITR can be extended in some circumstances, ITR has to be filed if the income exceeds from basis exemption limit for NRI.

Documents Required for Filing ITR by NRI

Here are the key documents you’ll need to file your ITR as an NRI:

• PAN Card: A valid Permanent Account Number (PAN) is mandatory for filing the return.

• Passport: Proof of non-residency status.

• Residential Status: The Income Tax department will determine your residential status (Resident, Non-Resident, or Resident but Not Ordinary Resident).

• Form 16 or 16A: If you are employed in India, Form 16 (TDS certificate) will be provided by your employer.

• Bank Account Details: Details of any Indian bank accounts you hold. You may also need to declare foreign bank account details if you have income from abroad.

• Income Details: 

1. Salary slip and TDS certificate (Form 16).
2. Proof of income from property (rent receipts, etc.).
3. Capital gains documents (for sale of property, stocks, etc.).

• Details of Tax Paid: Information on advance tax or TDS deductions.

• Tax-saving Investments: Proof of investments in eligible schemes for tax deductions (under sections like 80C, 80D, etc.).

• Other Income Proof: Documents related to income from sources like interest, dividends, or foreign income.

• Foreign Income and Foreign Assets Declaration: If you earn income from abroad or have foreign assets, this must be reported in the return (if applicable).

Income Tax Return for NRI

While filing the income tax return for NRI, choosing the right return form is important in order to ensure the compliances with NRI taxation. Till the AY (Assessment year) 2017 to 2018, NRIs were eligible to file the ITR 1 but from the financial year 2019-19 and 2019-20 amendments were made and ITR was restricted to resident individuals only, ITR 1 is not available for non-resident and non-ordinary residents.

ITR 2 for NRI Tax Return

ITR 2 is the right choice for NRIs as income tax return form, who have income source other than business or profession, which includes: -

1. Income from House Property: If you earn rent from properties located in India.

2. Interest Income: Income earned from interest such as saving account, fixed deposit and investment in India.

3. Capital Gains and other income: If applicable.

ITR 2 is suitable for them who have income from investments and non-business activities , it allows for a details declaration for NRIs who do not engage in business and professional activities in India.

ITR 3 for NRI Tax Return

NRIs who are engaged in business and professional activities in India then you are required to file ITR 3, this income tax return form is designed for the individuals who: - 

1. Have business or profession: Includes income earned from business operations and professional services.

2. Income earned from house property: It is similar to ITR 2 but along with business income.

3. Capital gain and other income: If applicable.

Key Steps to File the Tax Return

1. Register on the Income Tax Portal: If you haven't already, create an account on the Income Tax Department's e-filing portal to file your returns.

2. Choose the Correct ITR Form: Based on your income, select the form that fits your profile.

3. Fill in the Details: The form will ask you to provide details such as: 

1. Personal details (name, address, PAN, etc.)
2. Income details (salary, property income, capital gains, etc.)
3. Deductions (Section 80C, 80D, etc.)
4. Tax paid (advance tax or TDS deducted)

4. Submit the Form: After filling out the details, submit the return online through the portal.

5. E-verify the Return: After submission, e-verify the return using methods such as OTP, Aadhar-based e-verification, or Digital Signature

Why Should You Choose CRSPL?

• Detailed Guidance:- The experts of CRSPL will provide your every single detail and guidance so that you do not miss any step. We will keep you updated about eligibility criteria, document requirement and processing of application. 

• Preparation & Assistance:- CRSPL assists you in preparing all necessary documents for the successful application and guide you for further process. 

• Application Submission and Approval:- CRSPL handles the entire application submission process by ensuring all the details are accurate and in proper manner on behalf of our client.

• Expert Consultants:- For any query related to business or company, you can meet business consultants at CRSPL, they are readily available to assist you.

FAQs

Q 1. Do NRIs need to file ITR if no income in India?

Ans. No, if there is no income in India for NRI then there is no need to file ITR.

Q 2. What are NRI income tax slab rates?

Ans. NRI income tax slabs rates are mentioned above.

Q 3. Can NRI file ITR 1?

Ans. No, till the AY (Assessment year) 2017 to 2018, NRIs were eligible to file the ITR 1 but from the financial year 2019-19 and 2019-20 amendments were made and ITR was restricted to resident individuals only, ITR 1 is not available for non-resident and non-ordinary residents.