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Interestingly, in India , the majority of  Non-Resident Indians (NRIs) have bank accounts and invest substantial sums in various industries, including bank deposits, stocks, and real estate. Therefore, they have the option of increasing their assets. However, it puts them inside the ambit of ‘Income Tax,’ requiring them to submit Income Tax Returns properly and format on or before the Due Date. 

The Following Are Critical Milestones for Tax Implications for NRI From an NRI Viewpoint That Must Be Carefully Adhered to Before and Throughout the Filing of Their Income Tax Returns.

  • Establishing a resident’s status 

Non-Resident Indians are required to prove their residence tax status in India based on their time of stay within a given Financial Year (i.e., between 1st April to 31st March). This is an appropriate barrier since a person who is a resident of India gets taxed on their worldwide income, whilst non-residents are taxed on just their income from sources. 

  • Selecting the Most Appropriate Online Income Tax Service 

Form of Return to ease the burden of tax compliance and filing issues, the Central Board of Direct Taxes (CBDT) has made many adjustments to the filing processes. Numerous new Income-Tax Forms have been designed to categorize people properly. Additionally, selecting the proper Return Form is critical to avoiding additional hassles and unwarranted fines. 

  • Aadhar Card Irrelevance 

The Central Board of Direct Taxes (CBDT), citing section 139AA of the Income Tax Act, has said unequivocally that the Aadhar Act 2016 does not compel a person who is not an Indian resident to provide their Aadhar number. 

  • Assets and Liabilities in Detail 

NRIs with a total income over Rs. 50 lakhs are required to record the cost of certain assets (movable and immovable) situated in India, as well as the related liabilities, on the schedule of assets and liabilities (Schedule AL). This schedule is included in Forms 2, 3, and 4. 

  • Non-residents must have a legitimate foreign bank account to receive refunds. 

On 24th July 2017, the Central Board of Direct Taxes (CBDT) said unequivocally that non-residents who do not claim refunds or who do claim refunds and have a bank account in India are not needed to disclose the information of their overseas bank account while submitting their Income Tax Returns. 

However, such non-residents claiming an Income Tax refund without a legitimate bank account in India need to provide the information of at least one overseas bank account in their income tax return to get a refund. Additionally, non-resident Indians are not required to disclose their overseas assets or financial interests. 

Adhering to the most recent Income Tax regulations and provisions is critical to avoiding additional complexities and unwarranted fines. Non-Resident Indians (NRIs) are expected to complete the relevant IT Return Form with all essential information. They should also be very conscientious about meeting deadlines. A little awareness about income tax implications for NRIs may enable them to have the most incredible experiences possible.

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