Who is a Non-Resident in India?
In the context of Indian taxation, a Non-Resident Indian (NRI) is an individual who does not satisfy the conditions to be classified as a resident in India. According to the Income-tax Act, 1961, an individual is considered a resident in India if they meet any of the following conditions:
- Stay in India for 182 days or more during the financial year.
- Stay in India for 60 days or more during the financial year and 365 days or more in the preceding four financial years.
For an Indian citizen or a person of Indian origin who leaves India for employment abroad or who visits India, the period of 60 days mentioned above is extended to 182 days.
An individual who does not meet these criteria is classified as a Non-Resident
Tax Rate on Non-Resident in India
Non-Residents in India are subject to tax on income that is received or deemed to be received in India or that accrues or arises in India. The tax rates for Non-Residents vary depending on the type of income and the applicable tax slab. Here is a general outline:
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Income from Salary: Taxed according to the applicable slab rates.
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Income from House Property: Taxed at applicable slab rates.
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Income from Business and Profession: Taxed at applicable slab rates.
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Income from Capital Gains:
- Long-term capital gains (on listed securities): taxed at 10% without indexation for transfers that take place until July 22, 2024. For transfers occurring on or after July 23, 2024, long-term capital gains are taxed at 12.5% without indexation, aligning with the tax rate applicable to residents.
- Other long-term capital gains: taxed at 20% with indexation benefits. For transfers occurring on or after July 23, 2024, long-term capital gains are taxed at 12.5% without indexation, aligning with the tax rate applicable to residents.
- Short-term capital gains (on listed securities): taxed at 15% for transfers that take place until July 22, 2024. For transfers occurring on or after July 23, 2024, short-term capital gains are taxed at 20%, bringing the rate in line with that of residents.
Presumptive Taxation for Non-Residents
Certain categories of Non-Residents engaged in specific businesses can opt for presumptive taxation schemes under the Income-tax Act, which simplifies the process of income determination and tax filing:
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Shipping Business (Section 44B): Income from the operation of ships is presumed to be 7.5% of the gross receipts.
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Business of Providing Services for Exploration of Mineral Oils (Section 44BB): Income is presumed to be 10% of the gross receipts from services provided.
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Operation of Aircraft (Section 44BBA): Income from the operation of aircraft is presumed to be 5% of the gross receipts.
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Civil Construction or Erection of Plant and Machinery (Section 44BBB): Income from civil construction, erection, testing, or commissioning of power projects is presumed to be 10% of the gross receipts.
These provisions allow NRIs to simplify their tax calculations by applying a flat rate on gross receipts rather than maintaining detailed records of expenses.
Various Return and Forms Applicable for Non Resident Individual
Tax Forms Table
| Form |
Description |
| ITR 2 |
Not having income under the head Profits and Gains of Business or Profession |
| ITR 3 |
Having Income under the head Profits and Gains of Business or Profession |
| Form 12BB |
Evidence or particulars of HRA, LTC, Deduction of Interest on Borrowed Capital, Tax saving Claims / Deductions for the purpose of calculating Tax to be Deducted at Source (TDS) |
| Form 16 |
Salary paid, Deductions / Exemptions and Tax Deducted at Source (TDS) for the purpose of computing tax payable / refundable |
| Form 16A |
Certificate u/s 203 of the Income Tax Act, 1961 for tax TDS on Income other than Salary |
| Form 10E |
Form for furnishing particulars of Income for claiming relief U/S 89(1) when salary is paid in arrears or advance |
| Form 3CB-3CD |
Report of Audit of Accounts and Statement of Particulars required to be furnished u/s 44AB of the Income Tax Act, 1961 |
| Form 3CEB |
Report from an Accountant, relating to international transaction(s) and specified domestic transaction(s) |
| Form 3CE |
Report from an Accountant, relating to receipt of income by way of royalty or fees for technical services from Government or an Indian concern |
Why Choose E Accountax Manager for NRI Taxation?
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Expertise in NRI Taxation: At E Accountax Manager, we specialize in the unique challenges of NRI taxation. Our team of seasoned professionals has in-depth knowledge of Indian tax laws, as well as the specific provisions and benefits applicable to Non-Residents. We stay ahead of the latest regulatory changes to ensure your tax planning is always current and optimized.
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Comprehensive Service Offering: From determining your residential status to filing your income tax returns, we offer end-to-end solutions for all your taxation needs. Whether it’s managing capital gains, leveraging DTAA benefits, or planning for repatriation, our services cover every aspect of NRI taxation.
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Personalized Tax Strategies: We understand that each NRI has unique financial circumstances. Our approach is tailored to your specific needs, ensuring that your tax strategy is aligned with your financial goals and compliant with all relevant regulations.
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Hassle-Free Compliance: Managing tax compliance from abroad can be daunting. We take the hassle out of the process by handling all the necessary paperwork, documentation, and filings on your behalf, ensuring you remain compliant with Indian tax laws without any stress.
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Global Perspective, Local Expertise: As your Virtual CFO, we bring a global perspective combined with deep local expertise. We understand the interplay between your international income and Indian tax obligations, helping you navigate the complexities with ease.
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Transparent and Trustworthy: At E Accountax Manager, transparency and integrity are at the core of our services. We provide clear, honest advice and ensure you understand every aspect of your tax obligations and planning, so there are no surprises.
Choose E Accountax Manager for a seamless, efficient, and reliable NRI taxation experience, allowing you to focus on your global pursuits while we manage your tax responsibilities.
Conclusion
Navigating the complexities of NRI taxation can be challenging, given the myriad of regulations and frequent updates in tax laws. At E Accountax Manager, we are committed to providing you with accurate, up-to-date guidance that ensures your tax obligations are met with efficiency and compliance. Whether you are planning your investments, managing capital gains, or ensuring proper compliance with DTAA provisions, our expert team is here to help you optimize your tax strategy while safeguarding your financial interests. Let us be your trusted partner in managing your tax responsibilities, so you can focus on what truly matters—your global ambitions and success.
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