NRI Tax FAQs — Common Questions Answered

The standard due date is July 31 of the assessment year. For NRIs requiring audit, the deadline extends to October 31. Late filing under Section 234F attracts penalties of up to Rs. 5,000.

NRIs typically use ITR-2 for income from salary, property, capital gains, and other sources. ITR-3 is required if there is business or professional income. ITR-1 (Sahaj) is not available for NRIs.

Yes, belated returns can be filed until December 31 of the assessment year. However, late filing attracts a penalty and you lose the ability to carry forward certain losses. Interest under Section 234A also applies.

Key documents include: Form 16/16A (TDS certificates), bank statements (NRO/NRE), property sale documents, investment proofs for deductions, Form 26AS/AIS, passport, and PAN card. DTAA claimants also need TRC and Form 10F.

Log in to the income tax e-filing portal (incometax.gov.in), go to e-File > Income Tax Returns > View Filed Returns, and check the status. Refunds are typically processed within 4-6 months of filing. Ensure your bank account details are updated for direct credit.

DTAA (Double Tax Avoidance Agreement) is a bilateral treaty between India and another country to prevent the same income from being taxed in both jurisdictions. NRIs can claim reduced TDS rates on interest, dividends, and other income by submitting TRC and Form 10F.

Obtain a Tax Residency Certificate (TRC) from your country of residence, file Form 10F on the income tax portal, and submit both documents to the income payer (bank, tenant) before payment to get reduced TDS rates.

A TRC is a certificate from the tax authority of your residence country confirming your tax residency. For US residents, Form 6166 from the IRS serves as TRC. For UK, HMRC issues the certificate. It is mandatory for DTAA benefits.

Form 10F is a self-declaration filed on the Indian income tax portal alongside TRC. It contains your tax identification details and is required whenever you claim DTAA treaty benefits for reduced withholding tax.

India has DTAA with over 90 countries including USA, UK, UAE, Canada, Australia, Singapore, Germany, France, Japan, Netherlands, and most European and Asian nations. Each treaty has unique rates and provisions.

Yes, without DTAA the TDS on NRO interest is 30%. With DTAA, rates can be as low as 10-15% depending on the treaty. For example, USA-India DTAA allows 15% TDS on interest instead of 30%.

Buyers must deduct TDS at 12.5% (plus surcharge and cess) for LTCG on property held over 24 months. For STCG (under 24 months), TDS is 30% plus surcharge and cess. TDS must be deposited using Form 26QB within 30 days.

LTCG = Sale Price - Indexed Cost of Acquisition - Improvement Costs. Cost is indexed using the Cost Inflation Index (CII). Tax rate is 12.5%. STCG is the actual gain taxed at slab rates. Surcharge and 4% cess apply additionally.

Yes, apply to the Assessing Officer using Form 13 with income computation, proof of exemptions claimed, and supporting documents. If approved, the buyer deducts TDS at the lower specified rate instead of the full statutory rate.

Section 54: Reinvest LTCG in residential property within 2 years (purchase) or 3 years (construction). Section 54EC: Invest up to Rs. 50L in NHAI/REC bonds within 6 months. Section 54F: Reinvest full sale proceeds of non-residential asset in residential property.

Deposit proceeds in NRO account, obtain CA certificate (Form 15CB), file Form 15CA online, and submit to your bank. Maximum USD 1 million per financial year. All taxes must be paid and ITR filed before repatriation.

Yes, NRIs can buy residential and commercial property in India. Agricultural land, plantation property, and farmhouse cannot be purchased. Payment must be through NRE/NRO account or inward remittance from abroad. PAN is mandatory.

Yes, most AMCs accept NRI investments. However, US and Canada NRIs face restrictions due to FATCA — only select AMCs like UTI, SBI, PPFAS, and a few others accept their investments. KYC and FATCA documentation is required.

Yes. Equity LTCG above Rs. 1.25 lakh is taxed at 12.5%. Equity STCG at 20%. Debt fund gains are taxed at slab rates regardless of holding period. TDS is deducted at source on all NRI mutual fund redemptions.

NRO savings and FD interest is taxable at 30% TDS plus surcharge and cess. DTAA can reduce this to 10-15%. NRE account interest is completely tax-free in India.

Yes, through the Portfolio Investment Scheme (PIS). Open a PIS-linked demat and trading account with a registered broker. Individual NRI limit is 5% per company, aggregate NRI limit is 10% (can be raised to 24% with board approval).

LRS (Liberalised Remittance Scheme) allows resident Indians to remit up to USD 250,000 per year. For NRIs, repatriation from NRO is limited to USD 1 million per financial year with Form 15CA/15CB documentation.

Yes, NRIs can open and contribute to NPS. Contributions qualify for 80CCD(1) deduction up to Rs. 1.5 lakh and additional 80CCD(1B) deduction of Rs. 50,000. On maturity, 60% is tax-free lump sum and 40% must be annuitized.

FEMA (Foreign Exchange Management Act) governs foreign exchange transactions in India. It regulates NRI bank accounts, investments, property transactions, and fund repatriation. Non-compliance penalties can be up to 3 times the amount involved.

NRE accounts hold foreign earnings, are tax-free, and fully repatriable. NRO accounts hold Indian income, are taxable (30% TDS on interest), and repatriable up to USD 1M per year. Both are maintained in INR.

Penalties up to 3 times the amount involved, or Rs. 2 lakh if unquantifiable. Continuing violations attract Rs. 5,000 per day additional penalty. The Enforcement Directorate handles FEMA cases.

Inform your bank of status change. Savings accounts must be redesignated as NRO. Open NRE accounts for foreign income. FDs can continue till maturity or be converted. PPF accounts can continue but no new contributions.

Resident taxpayers (including RNOR) must disclose all foreign bank accounts, investment accounts, property, insurance, digital assets, and any signing authority on foreign accounts in Schedule FA of the ITR.

The new bill (Clause 422) compresses tax recovery timelines. NRI assets (bank accounts, FDs, property) can be attached within weeks of a demand becoming enforceable. Regular Form 26AS/AIS monitoring and prompt resolution of demands is critical.