Important Tax Considerations for NRIs in India

dear viewers July 31st 24 the deadline for filing the tax return is is just about a month away when it comes to question of filing of tax returns and dealing with the income tax department in India nraas have got several myths they live under some kind of an assumption they live under a feeling that they need to be doing certain things they should not be doing certain things they do not come under the perf of income tax when it comes to question of certain dealings all these things if you neglect while filing the tax tax return it can result in income tax changing you to sort out this matter and maybe you are sitting on a potential penalty that income tax might Liv on it in this episode I'm going to talk to the expert of the week chartered accountant Mr shamra to highlight what all the common mistakes nris make while they fil the tax stay till the end of the video everything that we discuss in this video is equally important and fil the tax R well within the due date of July 31st and stay on the right side of the law this is n clinic for you and I Dr chra kber your financial guide for a happy [Music] living NRI money Clinic no hype just the right advice dear viewers to talk about the mistakes the nris make while they fil the tax returns and the common things that are there in their mind which are not in accordance with the law of the land I have requested my eminent faculty chartered accountant Mr shamra Mr shamra is a practicing chartered accountant who sof direct taxation a person who is well ver with the taxation of nras a person who has sorted out a lot of tax queries of nras in the fast welcome to this episode Mr sham ra thank you Mr sham you file tax and returns for nrx countless of there you have been doing this over decades now you have seen a common pattern with the way nris treat certain matters we also keep getting a lot of queries and we also try to guide people of the right things to do for the benefit of the larger community of NRA I have listed a few questions today kindly provide me the professional answer for the things which people need to know when it comes to question of filing the tax return the first feeling the nris have got is if they are in a country a it gets taxed in only that country let's say that they have an income in India it get taxed in India and let's say that they live in l it gets taxed only in London or in what whichever the country is it the correct assumption or is there something they need to know about now before answering your query let me tell you that the answer which I'm going to give is out of my experience in whatever the case which I have handed now coming to your query your question is if a person earns an type of income say let us give an example that will be better understandable by anyone say a person who is a non-resident as far as India is concerned and is a resident in a country where there is taxation let us take a example of UK he's a resident of UK is's a non-resident in India that's particular person has earned interest income from nro and NRE accounts maintained with an Indian Bank where it will be taxed now first of all since this nro and NRE account interests are earned from an bank account in India it will be liable for taxes in India nro account interest definitely one has to pay taxes in India however for NRE account interest there is an exemption provided whereby to say that a person who is a non resident or a person resident outside of India as per femma will not be liable for payment of any taxes in India on Nar interest this being the case this exemption from taxation of interest from NR account has been provided only from the point of view of Indian tax authorities whereas if you are a resident of UK the government of UK has got the right for taxation of your income earned globally now interest income earned from nro account held in India as well as NRE account held in India that will be liable for taxes in UK and you are liable to pay the taxes in UK now the question might come whether it is you know going to create a double taxation the answer is no because of course in India on N interest you not pay tax you're liable for payment of tax only in you however nro account interest that was already taxed in India he paid the taxes so the taxes what he paid in India can be offset against the taxes Lael to be paid in UK this is how that concept of residency works so it is not correct to say that income earned in a one country can be taxed only in that country and not by any other country so the country where a person is a resident has got the right to tax their income earned globally Mr Shir when nris are dealing in India there are a lot of times when the TDS gets deducted now in case of interest that is paid on an account when they sell the mutual fund they come and buy certain vehicle or some Assets in India the TDS gets up the the nris have got is that I have paid my TDS that is the tax that I liable to pay beyond that I need not do anything I don't have to pay any more tax I don't have to take the trouble of filing the tax return and think about it all my responsibility towards the transaction is done with the TDs is it correct or what is that they need to know about no that understanding is incorrect the tax deducted source is only for identification of an income earned by a person it happens to both residents as well as non-resident just by dupion of taxes Source it does not mean that one has discharged their entire tax L it is man it will become almost mandatory for any person to file the income tax return in India on whom their tax has been directed and coming to non-resident especially the tax will normally get deducted at an higher rate so that means most of the time any income on which tax are DED Source in India or a non-rent if they declare that income in India obviously the tax dtive Source in most of the cases will be in excess of what actual tax liability they are supposed to discharge in thereby the excess tax rejected Source can be claimed as a refund by that person hence once TS is rected or withholding tax has been done by the payer of the income then does not mean the end of the compliance work as far as non sense or ocis are concerned Mr sham you are in the practicing line for so many years you have been do dealing with n is De in to an extent that when an NRI comes know that you have that you have probably prepared a checklist to check AB BC kind of a thing from the expertise that you have gained over a period of time and the common mistakes what people are doing can you list one two three four things what nraas do uh instead of me asking the question from the experience of yours in dealing with the nris can you list those things what NIS have to keep in mind see I will not say a mistake as such but you know there are certain common things which have keeps on happening with non because of their I I cannot say that you know lack of understanding but maybe not aware of the tax flows as such now most of the times they are aware that you know up to a certain level of income there is no tax liability so what they do is if my income is less than that then I I will not file the tax returns in India that's what they thinking did however that is not correct in many of the circumstances that we have PA to say that any income which are taxable in the hands of a non-resident at special rate of access such as dividend income which is taxable at 20% or say capital G which are taxable at 20% or 10% for sale of shares or mutual funds Etc or 15% for shortterm capital G from sale of Che etc those incomes will attract taxes in India irrespective of your slab that means even if you have 10 rupe income you're liable for payment of tax on that but since you're liable for payment of tax on that you're Lael for filing the tax RS in India so this is what normally one of the know Common misunderstanding I've got especially from the perspective of finding the tax apart from that I can give certain more example for example a person has sold a property in India and he has reinvested the same in say bonds or Mutual another property Etc thereby there is no taxable cap that's why he thinks that there is no tax actually supposed to be that's why he will not F the tax or say person who is claiming chapter 6 deduction say ATC ATD at tdd atg on donations medic claim or life insurance premium PID Children's School fee or say repayment of housing loan etc those dupion certain deductions can be claimed from taxable income it becomes important for that person to file the taxes or say if a person wants to as a non-resident he wants to claim lower rate of taxes or say exemption from certain incomes which is otherwise would have passed under Income Tax Act he will claim that benefit of exemption or low rate of taxes as for dou taxes govern at that time also it becomes mandatory for him to file the tax return say a person who wants to claim the refund of excess TDS tax paid by him at that time also it becomes mandatory for him to file the tax returns in India say a person who has got some losses so he may think that you know I got losses I need not file the tax return but it is not so if you file the loss return means you will be eligible for carrying forward that losses and if in case similar type of incomes or gains or profits you get in the next year or sub segement year you will get an option to offset these losses against those income thereby in future you need not pay any tax so that also might happen to carry forward such losses it becomes mandatory for you to file the tax apart from that there are certain things such as if a one person is maintaining a current account and he has deposited an amount in excess of rupes 1 CR during a financial year or a person who is you know paying in excess of 1 lakh rupees perom for you know for consumption of electricity which is for various electricity meters what he has got or say one person who is spending more than rupes 2 lakhs himself for himself or some other person is dependent or otherwise for travel to a foreign country those person Areo mandated for filing tax return irrespective of whether they have got taxable income in India or not these are all certain mandatory things which will have to be taken into consideration by a non-rent or OCA so has to file their tax return apart from this most of the times it is beneficial for a non-resident if they file their taxes because what happens is when you're filing the tax you'll be fing up a lot of other information in their tax return which will help them ultimately when they try to settle back by coming back to India Etc so that most of their incomes would have declared and they also would have declared that they are nonent so obviously by filing their tax returns as a non-resident it's kind of a declaration to the government saying that see I'm a non-resident in India otherwise you'll have to again substantiate now obviously if there is a notice that one need to substantiate but it becomes self explanatory most of the times you know if you file the your tax Mr Shir one of the mistakes NIS and it looks very casual but it has serious implication they become an NRI their fan is in a residence tax they go abroad and they believe that we don't have they are maintaining nro e n what is the obligation on the part of an NRI to income tax department when it comes to question of notifying them where their jurisdiction is these are the things that they need to do point one 2 three can you tell me what are the things and if they don't do it where they can earn kind of consequences that might fall I can some of your question as updating of a profile of a particular person with as to say it will be very much beneficial for a person to update their correct email ID and correct mobile number even a foreign mobile number they can update in the it portal by updating that all the notifications or say any compliers requirement Etc whatever the not in that respect will come to you only so you will be the first person who will be aware of the situation what is happening so it is advisable to have your own email ID and your own mobile number if requires the secondary email ID and second mobile number can also be added to say if you want your child accountant or a tax consultant to be aware of that apart from that it is also advisable what you have seen most of the times with the nonent especially is every time they come to India they take one separate mobile number by taking a separate Sim and say in case if they have that mobile number they'll update that in the port or they go and you know update that with the AAR so after they go back next time they come back they will not be having that mobile number most of the times it creates a very you know difficult situation for say if you have lost the password how to recover the password Etc so instead if you are having a Indian mobile number at least for entire one family maintain one mobile number Indian mobile number link that with your AAR as well as you know wherever the it portal Etc so that whenever OTP or recovery of password or something like that is required to be done then you will be having the Perman mobile number with you and Indian mobile number it might be very useful for you in times to come apart from that most of the times if the non is not having an a because of non linging of AAR and pan your pan is getting Innovative to avoid this situation it is advisable for updating the it portal database with your residential status or change in citizenship status as so for this actually you have to manually write to your jurisdictional officer either via email or say a plain letter and along with your documentary evidence to prove that you are a citizen of a country outside of India or you are a resident of a country outside of India so it is advisable to take your citizenship and resip Stat in most of the T it will solve your you know case of inoperative fan apart from that if you are dealing you know with your Properties or say you're having transactions in India and you are a nonent go back to your profile it profile in your it portal check where the jurisdiction is if your jurisdiction is with resident income tax officer it is advisable to change that to the jurisdictional international taxation officer under whose jurisdiction you will come so you'll have to see that where you are situated and better to make an application towards that apart from that it is also advisable to link your pan with other if you are a non-rent and having an other so instead of you know going for updating your status update your status in the idid portal but also link anytime it will be useful apart from that your bank accounts which are actually very much important for obtaining of getting the refund of exess taxes Fe go back and revalidate the bank BS in your it bort it will be very very useful for you and every year if you revalidate if there is an update to be done in the back account number or say if you have additional bank accounts all that can be added in the it portal and keep the it portal password with you also you cannot just depend on your tax consultant even if the tax consultant has registered on ID portal your pan with on behalf of you you please ask for the password of that keep it with you also let it be shared with you but keep it with you make sure that your mobile number and your email ID is updated in the it portal profile out which is also very important and every time when you file the tax return please check the it form apart from computation of income even in it your form one need to mention what is your email ID and mobile number so that also will be useful especially nowadays all the notices are coming via email the notices will be sent to the email which is been mentioned in your income tax return so it will be very useful if you mention your own email ID in your income tax return as well as in the it Buton and U from time to time you keep on the habit of verifying your it you log into your income tax portal and verify your ID portal and especially in the pending action plan tab there is something called as pending action so under that there will be some notices issued or there may be some notices issued from time to time it will be you know giving certain indications for you what is happening in the backround and what tax authorities are aware about you so it will be useful for you to be compliant by responding to the notice from time to time Mr s there is a saying that ignorance is bliss if somebody questions the simple answer is I did not know that's why I did not is ignorance a bliss when it comes to question of income tax matters if not what are the complex related things NIS have to keep in mind whether they file tax returns whether they live in India outside ois nraas whatever it is can you tell for the benefit of my community of audience here what are the things from a compliance point of view which they must follow or which they must maintain most of the times ignorance is not a bliss as far as income tax is concerned however if you are a litigator that means you should be ready to fight at a higher level at that time sometimes you know ignorance may come to your help but most of the times ignorance is not a bliss as far as income taxes it is better to be aware of what is happening and properly do compliance work as required from time to time from this perspect what I have seen is in non-rent is now what is happening is you know non-rent don't file their tax returns or there will be certain information with the tax authorities have they are actually telling you that I'm having this information via annual information statement which is being reflected in your it portal those information a informations annual information statement that is better for a person to go and verify from time to time so that if there is an transac which you have not carried out or a transaction which is having a value which is shown incorrectly on that can be corrected or a response against that can be filed so if any prevention is better than cure if you are taking preventive measures in everything that will always help you rather than ignoring everything so my advice is prevent okay how we can prevent you can prevent just by making yourself aware of what is happening and what is your rights and what is your duties from the perspective of Taxation or income tax I can say you can say that you know your duty or right is to file your tax returns in India and declare your income tax and P the tax whatever rightful tax and We complain declare all your taxable incomes in India this will help you a lot and whenever if there is a notice which is being issued Etc you will know if you have already done a preventing measure say for example there is some incorrect information in as which is reflected in your portter you go and respond saying that it is not for me it is of the other person or it is incorrect to what extent it is incorrect that also can be mentioned if a response is Qui you can always say whenever that next notice comes if at all it comes you can always say I've already filed the response this is my evidence for that you can always keep all that things then apart from that keep whatever records or evidences which will explain a particular transaction with you for a fairly longer period of time say 10 years 15 years because we have seen many cases where in of course the tax authorities will not have right to reopen an assessment or something like that but what happens is most of the time what you have seen is and S who will come to about a particular you know assessment order being passed that the penalty or demand is being levied after 2 three years the authority might have passed for order 3 years back and for an assessment year 156 now that is almost 9 years 10 years old now we has called to be saying that there was a such and such order for which there is a huge demand to do a compliance work or exercise your additional right you have under the law say to file an appeal or final WR to the court Etc you will have to produce documentary evidence so you'll have to go back for 14 15 transaction and accumulate all that documents and provide so from that perspective also it is important for you to maintain your documentary evidences even for 10 15 years at least in my VI even though the tax authorities don't have right to go beyond 10 years in most of the cases for certain cases Beyond 3 years also they cannot go back even then it is advisable to keep records at least for 15 years and whenever a notice comes just don't you know ignore that or just don't throw it in the dust wi or recycle bin rather you always better to respond to such notices with proper explanation along with necessary documentary evidence I always say whenever a person comes for a consultation that we normally don't treat the symptom we treat the disease we meaning thereby a person got a fever I am just giving a paracetamol that will just reduce his fever but the disease will not go I have to treat the disease automatically fever will come down so in the notice there will be you know that the demand has been raised I want the demand to be reduced to reduce the demand I just say that you know such and just a thing against the notice of demand that will not suffice you have to see why the demand has been raised it is against an assessment order me you have to fight against the assessment order at that and automatically he go so you should treat the disease not the symptom so from that perspective you have to be aware of what is happening take know necessary consultations advisory from your tax Cal tense from time to time and be aware of what is your position is at any point of time so from all these perspective it is advisable to be take preventive measures rather than ignoring the things one myth in the minds of nris NR n bank accounts the interest that is earned is tax yes therefore whenever I use my NR funds everything I do with n funds is taxfree number one number two because I flow a large chunk of money into my NR account nobody can question me because the interest ear is taxfree uh is it true what is that they have to keep in mind can income tax department P anyone for the flow of funds to an NR first of all there are two two questions the first question I'll answer the first any income earned from n account is it exempt the answer is no only interest income eared against n deposits and savings bank account will be exempt however from NRE funds if you have invested in any Indian stock market and earned say capital gain from sale of shares or say dividends from those shares or invested in mutual fund redeeming that or say invested in a property selling that and getting that money back again earning capital gain from that will that income earned say capital gain dividends or rental whatever will that go untaxed because of the fact that source of fund is from NRE answer is no because that incomes are earned in India India have not Exempted those incomes India has specifically Exempted only interest earned from NRE deposits or saving bank account as exempt so that's the first thing first then the second question is is about whether uh tax authorities can question and INF flow of funds into a non-resident external account the answer is yes they can question because of the fact that that account is maintained within Indian bank they have the jurisdiction over that so if an money flows into an NRE account they can always question the source of it however it is up to you how you defend the very first thing that you have to do is you have to prove that you are a non-resident once you prove that you are a non-resident then most most of your obligations as far as disclosing the source of income which has been flown to your n account will not attract that means if they ask you a question there is a bank account which is NR for that there are credits please explain the source first you have to prove that you are a non-resident prove it with a documentary evidence both of the things then you can always say since I'm a non-resident these funds which have earned outside of India and liable for tax only in that country are not in India hence I need not prove the source you have to explain like this rather than if you just say I'm a non-resident and this is an n fund they will never accept all this so documentary evidence is very important they can question you you can subate and C very easy thank you SRI ram my dear viewers when it comes to question of uh Income Tax Matters ignorance is not bless is a good idea that you study the subject it's a good idea you talk to the commercial accountants or the chartered accountant or the people who know about it it's a welcome step that during your next visit to India it's a good habit that you walk to one of the ched accountants who are closer to you in fact you don't have to wait till you come to India these days everything is online you can find a chartered accounter who can do a lot of things for you and check from the parent that you have what are the things that needs to be done if there are areas which need to be address if there are things that need to be uh rectified or corrected it's time that you rectify and stay on the right side will look like a bit of an irritation at this point of time a stitching time would save nine instead of receiving a notice at some point of time in future it makes absolute sense for you to attend to these small small things at this point of time look out for the charted accountant if you have one that's excellent if you don't have one uh NRI money Clinic has also built a team of Chartered Accountants as its panelist and we have made note that if somebody is looking out for chartered accountant Services you can reach to us through a WhatsApp message our numbers are given in our description box below just check the description box below number is given they also provided a link there click on the link it takes you to the WhatsApp send us a message that you're looking out for ched accountant Services we will try and find out a charted Appo who is closer to you so do not delay stay on the right side of law file your tax return it makes absolute sense for you to file a nil tax return if you have no other income it makes absolute sense for you to have a relationship with a chartered accountant who can attend to all these things year after year so I wish that you would be on the right side of the law and let there not be a day where a notice is served on you thank you Shang for all these points and I'm very sure my audience is enlightened with this small but very important steps thank you very much for your kindness to uh to our program and uh educate our audience thank you very much sir you're welcome you're welcome dear viewers hope the episode that I have done today helped you to understand from the point of of income tax department and it's your compliance obligations what are the things that you need to attend if you got the complete information on this do not forget to give me a thumbs up your subscription matters for us a lot of you watch my videos but forget to hit the Subscribe button may I request you to press the Subscribe button right now and press the Bell icon do not miss one single video which are value fill which we produce for you thank you very much for watching this episode on NR Clinic I shall be back with you with yet another topic with yet other expert next Tu there till then stay safe j h press the Bell icon for more details and subscribe our Channel [Music]

dear viewers July 31st 24 the deadline for filing the tax return is is just about a month away when it comes to question of filing of tax returns and dealing with the income tax department in India nraas have got several myths they live under some kind of an assumption they live under a feeling that they need to be doing certain things they should not be doing certain things they do not come under the perf of income tax when it comes to question of certain dealings all these things if you neglect while filing the tax tax return it can result in income tax changing you to sort out this matter and maybe you are sitting on a potential penalty that income tax might Liv on it in this episode I&#39;m going to talk to the expert of the week chartered accountant Mr shamra to highlight what all the common mistakes nris make while they fil the tax stay till the end of the video everything that we discuss in this video is equally important and fil the tax R well within the due date of July 31st and stay on the right side of the law this is n clinic for you and I Dr chra kber your financial guide for a happy [Music] living NRI money Clinic no hype just the right advice dear viewers to talk about the mistakes the nris make while they fil the tax returns and the common things that are there in their mind which are not in accordance with the law of the land I have requested my eminent faculty chartered accountant Mr shamra Mr shamra is a practicing chartered accountant who sof direct taxation a person who is well ver with the taxation of nras a person who has sorted out a lot of tax queries of nras in the fast welcome to this episode Mr sham ra thank you Mr sham you file tax and returns for nrx countless of there you have been doing this over decades now you have seen a common pattern with the way nris treat certain matters we also keep getting a lot of queries and we also try to guide people of the right things to do for the benefit of the larger community of NRA I have listed a few questions today kindly provide me the professional answer for the things which people need to know when it comes to question of filing the tax return the first feeling the nris have got is if they are in a country a it gets taxed in only that country let&#39;s say that they have an income in India it get taxed in India and let&#39;s say that they live in l it gets taxed only in London or in what whichever the country is it the correct assumption or is there something they need to know about now before answering your query let me tell you that the answer which I&#39;m going to give is out of my experience in whatever the case which I have handed now coming to your query your question is if a person earns an type of income say let us give an example that will be better understandable by anyone say a person who is a non-resident as far as India is concerned and is a resident in a country where there is taxation let us take a example of UK he&#39;s a resident of UK is&#39;s a non-resident in India that&#39;s particular person has earned interest income from nro and NRE accounts maintained with an Indian Bank where it will be taxed now first of all since this nro and NRE account interests are earned from an bank account in India it will be liable for taxes in India nro account interest definitely one has to pay taxes in India however for NRE account interest there is an exemption provided whereby to say that a person who is a non resident or a person resident outside of India as per femma will not be liable for payment of any taxes in India on Nar interest this being the case this exemption from taxation of interest from NR account has been provided only from the point of view of Indian tax authorities whereas if you are a resident of UK the government of UK has got the right for taxation of your income earned globally now interest income earned from nro account held in India as well as NRE account held in India that will be liable for taxes in UK and you are liable to pay the taxes in UK now the question might come whether it is you know going to create a double taxation the answer is no because of course in India on N interest you not pay tax you&#39;re liable for payment of tax only in you however nro account interest that was already taxed in India he paid the taxes so the taxes what he paid in India can be offset against the taxes Lael to be paid in UK this is how that concept of residency works so it is not correct to say that income earned in a one country can be taxed only in that country and not by any other country so the country where a person is a resident has got the right to tax their income earned globally Mr Shir when nris are dealing in India there are a lot of times when the TDS gets deducted now in case of interest that is paid on an account when they sell the mutual fund they come and buy certain vehicle or some Assets in India the TDS gets up the the nris have got is that I have paid my TDS that is the tax that I liable to pay beyond that I need not do anything I don&#39;t have to pay any more tax I don&#39;t have to take the trouble of filing the tax return and think about it all my responsibility towards the transaction is done with the TDs is it correct or what is that they need to know about no that understanding is incorrect the tax deducted source is only for identification of an income earned by a person it happens to both residents as well as non-resident just by dupion of taxes Source it does not mean that one has discharged their entire tax L it is man it will become almost mandatory for any person to file the income tax return in India on whom their tax has been directed and coming to non-resident especially the tax will normally get deducted at an higher rate so that means most of the time any income on which tax are DED Source in India or a non-rent if they declare that income in India obviously the tax dtive Source in most of the cases will be in excess of what actual tax liability they are supposed to discharge in thereby the excess tax rejected Source can be claimed as a refund by that person hence once TS is rected or withholding tax has been done by the payer of the income then does not mean the end of the compliance work as far as non sense or ocis are concerned Mr sham you are in the practicing line for so many years you have been do dealing with n is De in to an extent that when an NRI comes know that you have that you have probably prepared a checklist to check AB BC kind of a thing from the expertise that you have gained over a period of time and the common mistakes what people are doing can you list one two three four things what nraas do uh instead of me asking the question from the experience of yours in dealing with the nris can you list those things what NIS have to keep in mind see I will not say a mistake as such but you know there are certain common things which have keeps on happening with non because of their I I cannot say that you know lack of understanding but maybe not aware of the tax flows as such now most of the times they are aware that you know up to a certain level of income there is no tax liability so what they do is if my income is less than that then I I will not file the tax returns in India that&#39;s what they thinking did however that is not correct in many of the circumstances that we have PA to say that any income which are taxable in the hands of a non-resident at special rate of access such as dividend income which is taxable at 20% or say capital G which are taxable at 20% or 10% for sale of shares or mutual funds Etc or 15% for shortterm capital G from sale of Che etc those incomes will attract taxes in India irrespective of your slab that means even if you have 10 rupe income you&#39;re liable for payment of tax on that but since you&#39;re liable for payment of tax on that you&#39;re Lael for filing the tax RS in India so this is what normally one of the know Common misunderstanding I&#39;ve got especially from the perspective of finding the tax apart from that I can give certain more example for example a person has sold a property in India and he has reinvested the same in say bonds or Mutual another property Etc thereby there is no taxable cap that&#39;s why he thinks that there is no tax actually supposed to be that&#39;s why he will not F the tax or say person who is claiming chapter 6 deduction say ATC ATD at tdd atg on donations medic claim or life insurance premium PID Children&#39;s School fee or say repayment of housing loan etc those dupion certain deductions can be claimed from taxable income it becomes important for that person to file the taxes or say if a person wants to as a non-resident he wants to claim lower rate of taxes or say exemption from certain incomes which is otherwise would have passed under Income Tax Act he will claim that benefit of exemption or low rate of taxes as for dou taxes govern at that time also it becomes mandatory for him to file the tax return say a person who wants to claim the refund of excess TDS tax paid by him at that time also it becomes mandatory for him to file the tax returns in India say a person who has got some losses so he may think that you know I got losses I need not file the tax return but it is not so if you file the loss return means you will be eligible for carrying forward that losses and if in case similar type of incomes or gains or profits you get in the next year or sub segement year you will get an option to offset these losses against those income thereby in future you need not pay any tax so that also might happen to carry forward such losses it becomes mandatory for you to file the tax apart from that there are certain things such as if a one person is maintaining a current account and he has deposited an amount in excess of rupes 1 CR during a financial year or a person who is you know paying in excess of 1 lakh rupees perom for you know for consumption of electricity which is for various electricity meters what he has got or say one person who is spending more than rupes 2 lakhs himself for himself or some other person is dependent or otherwise for travel to a foreign country those person Areo mandated for filing tax return irrespective of whether they have got taxable income in India or not these are all certain mandatory things which will have to be taken into consideration by a non-rent or OCA so has to file their tax return apart from this most of the times it is beneficial for a non-resident if they file their taxes because what happens is when you&#39;re filing the tax you&#39;ll be fing up a lot of other information in their tax return which will help them ultimately when they try to settle back by coming back to India Etc so that most of their incomes would have declared and they also would have declared that they are nonent so obviously by filing their tax returns as a non-resident it&#39;s kind of a declaration to the government saying that see I&#39;m a non-resident in India otherwise you&#39;ll have to again substantiate now obviously if there is a notice that one need to substantiate but it becomes self explanatory most of the times you know if you file the your tax Mr Shir one of the mistakes NIS and it looks very casual but it has serious implication they become an NRI their fan is in a residence tax they go abroad and they believe that we don&#39;t have they are maintaining nro e n what is the obligation on the part of an NRI to income tax department when it comes to question of notifying them where their jurisdiction is these are the things that they need to do point one 2 three can you tell me what are the things and if they don&#39;t do it where they can earn kind of consequences that might fall I can some of your question as updating of a profile of a particular person with as to say it will be very much beneficial for a person to update their correct email ID and correct mobile number even a foreign mobile number they can update in the it portal by updating that all the notifications or say any compliers requirement Etc whatever the not in that respect will come to you only so you will be the first person who will be aware of the situation what is happening so it is advisable to have your own email ID and your own mobile number if requires the secondary email ID and second mobile number can also be added to say if you want your child accountant or a tax consultant to be aware of that apart from that it is also advisable what you have seen most of the times with the nonent especially is every time they come to India they take one separate mobile number by taking a separate Sim and say in case if they have that mobile number they&#39;ll update that in the port or they go and you know update that with the AAR so after they go back next time they come back they will not be having that mobile number most of the times it creates a very you know difficult situation for say if you have lost the password how to recover the password Etc so instead if you are having a Indian mobile number at least for entire one family maintain one mobile number Indian mobile number link that with your AAR as well as you know wherever the it portal Etc so that whenever OTP or recovery of password or something like that is required to be done then you will be having the Perman mobile number with you and Indian mobile number it might be very useful for you in times to come apart from that most of the times if the non is not having an a because of non linging of AAR and pan your pan is getting Innovative to avoid this situation it is advisable for updating the it portal database with your residential status or change in citizenship status as so for this actually you have to manually write to your jurisdictional officer either via email or say a plain letter and along with your documentary evidence to prove that you are a citizen of a country outside of India or you are a resident of a country outside of India so it is advisable to take your citizenship and resip Stat in most of the T it will solve your you know case of inoperative fan apart from that if you are dealing you know with your Properties or say you&#39;re having transactions in India and you are a nonent go back to your profile it profile in your it portal check where the jurisdiction is if your jurisdiction is with resident income tax officer it is advisable to change that to the jurisdictional international taxation officer under whose jurisdiction you will come so you&#39;ll have to see that where you are situated and better to make an application towards that apart from that it is also advisable to link your pan with other if you are a non-rent and having an other so instead of you know going for updating your status update your status in the idid portal but also link anytime it will be useful apart from that your bank accounts which are actually very much important for obtaining of getting the refund of exess taxes Fe go back and revalidate the bank BS in your it bort it will be very very useful for you and every year if you revalidate if there is an update to be done in the back account number or say if you have additional bank accounts all that can be added in the it portal and keep the it portal password with you also you cannot just depend on your tax consultant even if the tax consultant has registered on ID portal your pan with on behalf of you you please ask for the password of that keep it with you also let it be shared with you but keep it with you make sure that your mobile number and your email ID is updated in the it portal profile out which is also very important and every time when you file the tax return please check the it form apart from computation of income even in it your form one need to mention what is your email ID and mobile number so that also will be useful especially nowadays all the notices are coming via email the notices will be sent to the email which is been mentioned in your income tax return so it will be very useful if you mention your own email ID in your income tax return as well as in the it Buton and U from time to time you keep on the habit of verifying your it you log into your income tax portal and verify your ID portal and especially in the pending action plan tab there is something called as pending action so under that there will be some notices issued or there may be some notices issued from time to time it will be you know giving certain indications for you what is happening in the backround and what tax authorities are aware about you so it will be useful for you to be compliant by responding to the notice from time to time Mr s there is a saying that ignorance is bliss if somebody questions the simple answer is I did not know that&#39;s why I did not is ignorance a bliss when it comes to question of income tax matters if not what are the complex related things NIS have to keep in mind whether they file tax returns whether they live in India outside ois nraas whatever it is can you tell for the benefit of my community of audience here what are the things from a compliance point of view which they must follow or which they must maintain most of the times ignorance is not a bliss as far as income tax is concerned however if you are a litigator that means you should be ready to fight at a higher level at that time sometimes you know ignorance may come to your help but most of the times ignorance is not a bliss as far as income taxes it is better to be aware of what is happening and properly do compliance work as required from time to time from this perspect what I have seen is in non-rent is now what is happening is you know non-rent don&#39;t file their tax returns or there will be certain information with the tax authorities have they are actually telling you that I&#39;m having this information via annual information statement which is being reflected in your it portal those information a informations annual information statement that is better for a person to go and verify from time to time so that if there is an transac which you have not carried out or a transaction which is having a value which is shown incorrectly on that can be corrected or a response against that can be filed so if any prevention is better than cure if you are taking preventive measures in everything that will always help you rather than ignoring everything so my advice is prevent okay how we can prevent you can prevent just by making yourself aware of what is happening and what is your rights and what is your duties from the perspective of Taxation or income tax I can say you can say that you know your duty or right is to file your tax returns in India and declare your income tax and P the tax whatever rightful tax and We complain declare all your taxable incomes in India this will help you a lot and whenever if there is a notice which is being issued Etc you will know if you have already done a preventing measure say for example there is some incorrect information in as which is reflected in your portter you go and respond saying that it is not for me it is of the other person or it is incorrect to what extent it is incorrect that also can be mentioned if a response is Qui you can always say whenever that next notice comes if at all it comes you can always say I&#39;ve already filed the response this is my evidence for that you can always keep all that things then apart from that keep whatever records or evidences which will explain a particular transaction with you for a fairly longer period of time say 10 years 15 years because we have seen many cases where in of course the tax authorities will not have right to reopen an assessment or something like that but what happens is most of the time what you have seen is and S who will come to about a particular you know assessment order being passed that the penalty or demand is being levied after 2 three years the authority might have passed for order 3 years back and for an assessment year 156 now that is almost 9 years 10 years old now we has called to be saying that there was a such and such order for which there is a huge demand to do a compliance work or exercise your additional right you have under the law say to file an appeal or final WR to the court Etc you will have to produce documentary evidence so you&#39;ll have to go back for 14 15 transaction and accumulate all that documents and provide so from that perspective also it is important for you to maintain your documentary evidences even for 10 15 years at least in my VI even though the tax authorities don&#39;t have right to go beyond 10 years in most of the cases for certain cases Beyond 3 years also they cannot go back even then it is advisable to keep records at least for 15 years and whenever a notice comes just don&#39;t you know ignore that or just don&#39;t throw it in the dust wi or recycle bin rather you always better to respond to such notices with proper explanation along with necessary documentary evidence I always say whenever a person comes for a consultation that we normally don&#39;t treat the symptom we treat the disease we meaning thereby a person got a fever I am just giving a paracetamol that will just reduce his fever but the disease will not go I have to treat the disease automatically fever will come down so in the notice there will be you know that the demand has been raised I want the demand to be reduced to reduce the demand I just say that you know such and just a thing against the notice of demand that will not suffice you have to see why the demand has been raised it is against an assessment order me you have to fight against the assessment order at that and automatically he go so you should treat the disease not the symptom so from that perspective you have to be aware of what is happening take know necessary consultations advisory from your tax Cal tense from time to time and be aware of what is your position is at any point of time so from all these perspective it is advisable to be take preventive measures rather than ignoring the things one myth in the minds of nris NR n bank accounts the interest that is earned is tax yes therefore whenever I use my NR funds everything I do with n funds is taxfree number one number two because I flow a large chunk of money into my NR account nobody can question me because the interest ear is taxfree uh is it true what is that they have to keep in mind can income tax department P anyone for the flow of funds to an NR first of all there are two two questions the first question I&#39;ll answer the first any income earned from n account is it exempt the answer is no only interest income eared against n deposits and savings bank account will be exempt however from NRE funds if you have invested in any Indian stock market and earned say capital gain from sale of shares or say dividends from those shares or invested in mutual fund redeeming that or say invested in a property selling that and getting that money back again earning capital gain from that will that income earned say capital gain dividends or rental whatever will that go untaxed because of the fact that source of fund is from NRE answer is no because that incomes are earned in India India have not Exempted those incomes India has specifically Exempted only interest earned from NRE deposits or saving bank account as exempt so that&#39;s the first thing first then the second question is is about whether uh tax authorities can question and INF flow of funds into a non-resident external account the answer is yes they can question because of the fact that that account is maintained within Indian bank they have the jurisdiction over that so if an money flows into an NRE account they can always question the source of it however it is up to you how you defend the very first thing that you have to do is you have to prove that you are a non-resident once you prove that you are a non-resident then most most of your obligations as far as disclosing the source of income which has been flown to your n account will not attract that means if they ask you a question there is a bank account which is NR for that there are credits please explain the source first you have to prove that you are a non-resident prove it with a documentary evidence both of the things then you can always say since I&#39;m a non-resident these funds which have earned outside of India and liable for tax only in that country are not in India hence I need not prove the source you have to explain like this rather than if you just say I&#39;m a non-resident and this is an n fund they will never accept all this so documentary evidence is very important they can question you you can subate and C very easy thank you SRI ram my dear viewers when it comes to question of uh Income Tax Matters ignorance is not bless is a good idea that you study the subject it&#39;s a good idea you talk to the commercial accountants or the chartered accountant or the people who know about it it&#39;s a welcome step that during your next visit to India it&#39;s a good habit that you walk to one of the ched accountants who are closer to you in fact you don&#39;t have to wait till you come to India these days everything is online you can find a chartered accounter who can do a lot of things for you and check from the parent that you have what are the things that needs to be done if there are areas which need to be address if there are things that need to be uh rectified or corrected it&#39;s time that you rectify and stay on the right side will look like a bit of an irritation at this point of time a stitching time would save nine instead of receiving a notice at some point of time in future it makes absolute sense for you to attend to these small small things at this point of time look out for the charted accountant if you have one that&#39;s excellent if you don&#39;t have one uh NRI money Clinic has also built a team of Chartered Accountants as its panelist and we have made note that if somebody is looking out for chartered accountant Services you can reach to us through a WhatsApp message our numbers are given in our description box below just check the description box below number is given they also provided a link there click on the link it takes you to the WhatsApp send us a message that you&#39;re looking out for ched accountant Services we will try and find out a charted Appo who is closer to you so do not delay stay on the right side of law file your tax return it makes absolute sense for you to file a nil tax return if you have no other income it makes absolute sense for you to have a relationship with a chartered accountant who can attend to all these things year after year so I wish that you would be on the right side of the law and let there not be a day where a notice is served on you thank you Shang for all these points and I&#39;m very sure my audience is enlightened with this small but very important steps thank you very much for your kindness to uh to our program and uh educate our audience thank you very much sir you&#39;re welcome you&#39;re welcome dear viewers hope the episode that I have done today helped you to understand from the point of of income tax department and it&#39;s your compliance obligations what are the things that you need to attend if you got the complete information on this do not forget to give me a thumbs up your subscription matters for us a lot of you watch my videos but forget to hit the Subscribe button may I request you to press the Subscribe button right now and press the Bell icon do not miss one single video which are value fill which we produce for you thank you very much for watching this episode on NR Clinic I shall be back with you with yet another topic with yet other expert next Tu there till then stay safe j h press the Bell icon for more details and subscribe our Channel [Music]

Transcript for:Important Tax Considerations for NRIs in India

Transcript for:
Important Tax Considerations for NRIs in India