When do NRIs need to Pay Income tax In India

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When do NRIs need to Pay Income tax In India?
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One of the most common doubt among every new NRIs
mind is whether they need to file income tax
returns in India or not. As I told earlier that
it's not mandatory to file income tax return in
India, but now questions comes when do NRIs need
to file income tax return in India? when it's
mandatory for NRI to file income tax return in
India. I'll try to answer these questions in this
article. First thing first, NRI needs to pay tax
on any income earned in India Similar to resident
taxpayers, the basic tax exemption limit for NRIs
are also 2,50,000 for the year 2015-16. It means
an NRI needs to file income tax returns when
their total income earned or accrued in India is
more than 2.5 lakh (before any deductions e.g.
investments made under section 80C). So if any
NRIs income earned from rentals, capital gains
and interest on NRO fixed deposits are more than
2.5 lakh than he needs to file income tax return
in India.
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• Apart from that NRI Banking should also file
  income tax return in following cases
• If he wants to get a tax refund for TDS deducted
  on NRO fixed deposits
• If NRI has short term or long term capital gains
  from any investments or assets, even when gains
  are less than 2.5 lakh INR. If NRI wants to carry
  forward losses so they can be adjusted later.
• By the way, there is also a special case for NRIs
  on which he doesn't need to file income tax
  return if income from short term or long term
  capital gains is the only income and TDS has been
  deducted from it. So, if you are only earning
  interest on fixed deposits and you are happy with
  the TDS deducted, you are exempted from filing
  income tax return in India.

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Does overseas income of NRI taxable in India?
If you know, tax liability depends upon your
status on a given financial year, you could still
be a resident in the year you move abroad and in
that case, your global income will be taxable in
India. For NRIs, global income is not a taxable
but any income earned in India is taxable In
India. See here to learn more about your tax
liability if you are earning overseas.
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Does interest earned on NRE and FCNR fixed
deposit are taxable in India? No, As I said
earlier, interest earned on NRE fixed deposit is
tax-free in India, so is the interest earned on
FCNR fixed deposits. As much I know they are also
not part of your taxable income in India e.g. you
could earn 5 lakhs INR in NRE fixed deposit but
you don't need to file income tax return. That's
why no TDS is deducted on NRE fixed deposit
irrespective of how much interest you earn. Same
is true for FCNR term deposit as well, which is
maintained in foreign currency as opposed to INR.
No TDS and no income tax on interest earned there
as well.
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Summary
Now you have a basic idea of when an NRI needs to
file income tax return in India and when he is
not required to file income tax return. Let's
revise them for quick review NRIs needs to file
income tax returns in India when - His total
income earned in India is more than 2.5 lakh
before any deductions e.g 80C deductions. Income
must be earned or accrued from India e.g.
interest on NRO deposits, rental income on a
house located in India, royalty etc. Though
interest earned on NRE fixed deposit is not
included here.
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NRIs are not required to file income tax return
in India
if you have no income in India then you don't
need to file income tax return. - If only income
earned is via short term or long term capital
gains and TDS is already deducted. - Only
earning interest on NRE and FCNR fixed deposit.
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That's all about when do NRIs need to file income
tax return in IndiaThat's all about when do NRIs
need to file income tax return in India. As I
said, it's not mandatory but you need to know
when you have to. This is why it's also best to
invest for NRI to open NRE account and use that
while sending money to India as that didn't add
into their taxable income.
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Source http//savingsfunda.blogspot.com/2016/03/w
hen-do-nris-need-to-file-income-tax-return-India.h
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