As a non-resident Indian, you can have the unfortunate distinction of paying tax twice. If you live and work abroad, your foreign earnings will be subject to taxation in your host nation. If you still have interests, assets, or business dealings in India that generate income, however, you will be required to pay tax in India on the Indian income. It seems reasonable that you would wish to maximize all possible tax deductions and allowances.
There are several tax savings opportunities from nri tax consultant Pune for non-resident Indians. Following are five recommendations to assist you to optimize your tax situation as a non-resident Indian living and working overseas. These recommendations include optimizing your pension fund and mortgage loan deductions, as well as the sale of foreign assets restrictions.
Any income earned outside of India that falls outside of the categories listed above is exempt from income tax in India. The money you make and accumulate abroad as a non-resident is subject to taxation in your host nation.
Therefore, as a non-resident Indian, you may be subject to taxation in India. Let’s examine five techniques to reduce your tax liability.
- Maximize Your Tax Deductions
As a non-resident Indian, you are ineligible for a number of deductions that resident Indians are eligible for. Investing in social schemes, such as PPF, NSC Certificates, does not qualify for tax deductions. However, Life Insurance premium does qualify. Also unavailable to you are tax deductions for medical benefits and medical costs for specified diseases.
You do have access to the National Pension System and its associated tax deductions.
- Obtain a PAN Card
A Permanent Account Number (PAN) is a number that identifies you as an Indian taxpayer. A Permanent Account Number is used to combat tax fraud. A Permanent Account Number is required to file for a tax refund.
Over a particular level, income earned in India is subject to Tax Deducted at Source. If you fail to furnish your Permanent Account Number while investing in India, you may likely be subject to a larger amount of Tax Deducted at Source.
- Maintain Your Non-Resident Status
While residing overseas, your foreign earnings are not taxed in India. If, however, your non-resident status is uncertain, the Indian tax services may tax your income. Maintain your NRI status if you do not want your tax situation to get complicated.
- Pay and Recover Mortgage Interest
As a non-resident Indian, you are eligible to claim tax deductions for your Indian property. You are entitled to a tax deduction if you pay the interest on your mortgage or the property tax on your residence. This makes buying property in India an excellent investment opportunity for non-residents.
The profit from the sale of your Indian property is subject to capital gains tax. To remain at a lower tax rate, try to restrict the number of capital gains you realize annually.
Conclusion
Being an Indian non-resident might complicate your tax situation. If you reside and earn money overseas, your foreign earnings will be subject to taxation in your host nation. However, if you still have interests, assets, or business dealings in India that generate income, you will be required to pay tax in India on the Indian income.
As a non-resident Indian (NRI), there are methods to reduce your tax burden with the assistance of nri tax advisor in Pune. When doing your taxes, keep these five suggestions in mind to help you pay less in taxes in the long run.
