Why do to determine residential status before filing Income Tax Return in India?
The taxability of incomes depends on your residential status in India. Let’s say, for example, if your residential status is NRI then only the income earned or accrued in India will be taxable for you, and not your foreign income. Whereas if your residential status is Ordinary Resident of India then your global income will be taxable in India.
Does being an Indian Citizen make the Residential Status an Ordinary Resident?
No. Being an Indian citizen is one of the criteria to determine the residential status, but not the only one. One must fulfill the conditions of stay in India as prescribed in the Income Tax Act around the number of days of stay, etc. to become an ordinary resident in India.
How can NRI pay Tax on Income earned in India?
If your residential status is an NRI, you can pay income tax online using the net banking facility. It is not necessary to pay the tax from the assessee’s own bank account. So an NRI can pay tax from a relative or friend’s bank account and then remit them the tax amount.
If the residential status is NRI, do I have to file income tax return?
If your residential status is NRI, then you need to have to file Income Tax Return if your total income earned in India is above INR 2,50,000. You can also claim the refund and carry forward the losses when filing your ITR.
Is TDS applicable to NRIs?
Yes. TDS is applicable on payments made to NRIs. Separate rates of TDS are prescribed by Income Tax Act for different types of payments made to NRIs.
Can NRI file Income Tax Return without PAN?
No. PAN is must if you want to file an income tax return. So NRI will have to apply for the PAN first. Once the PAN is obtained then only he will be able to file an income tax return.