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    NRI Services

    NRI

    An Indian citizen or a foreign citizen of Indian origin who has stayed abroad for employment/carrying out business or vocation for 182 days or more or under circumstances indicating an intention for an unknown duration of stay abroad is a Non-Resident Indian (NRI).

    What is benefit of being NRI?

    NRIs do not have to pay any income tax to the Indian government unless the income is from India. The government of India has reserved seats for NRI candidates in every significant polity. NRIs have reserved seats in Indian education Institutes. They are eligible to be a voter in every national and local election.

    Who is considered an NRI?

    According to Section 6 of the Income Tax Act, an individual is classified as an NRI if:

    • They are a citizen of India or of Indian origin, but
    • They do not reside in India as per the prescribed criteria.

    Simply put, if you are an Indian citizen or of Indian origin but do not meet the residency rules, you are treated as an NRI for tax purposes.

    What income of a Non-Resident is taxable in India?

    An NRI is liable to pay tax only on income earned or received in India. This includes:
    • Income received directly or indirectly in India
    • Income that accrues or arises in India

    Section 9 of the Income Tax Act lists out the specific circumstances under which income is considered to be earned in India and, therefore, taxable.

    How can NRIs avoid Double Taxation?

    NRIs may face double taxation—being taxed in both India and their country of residence. To avoid this:
    • Double Taxation Avoidance Agreements (DTAAs) have been signed between India and many countries.
    • Under DTAA provisions, NRIs can either claim exemption from paying tax again in their resident country or claim credit for the taxes paid in India while filing their tax returns abroad.

    Do NRIs have to pay Advance Tax?

    Yes.
    If an NRI’s total tax liability exceeds ₹10,000 in a financial year, they must pay advance tax in installments.
    Failure to pay advance tax on time will attract interest penalties under Sections 234B and 234C.

    When should an NRI file a Return of Income in India?

    An NRI must file an Income Tax Return (ITR) if:
    • Their total income in India exceeds ₹2,50,000 during a financial year.

    The due date for filing is 31st July of the assessment year.

    Important:

    From FY 2019-20 onwards, NRIs must also file a return even if their income is below ₹2,50,000 if they:

    • Deposited ₹1 crore or more in a current account
    • Spent ₹2 lakh or more on foreign travel (for self or others)
    • Incurred ₹1 lakh or more towards electricity bills

    If none of these conditions are met, and their income is below ₹2,50,000, NRIs are not required to file a return.

    Can an NRI file a belated return if they miss the due date?

    Yes, NRIs can still file a belated ITR with a penalty:

    • ₹5,000 if filed between 1st August and 31st December
    • ₹10,000 if filed between 1st January and 31st March (If total income is below ₹5 lakh, the maximum penalty is only ₹1,000.)

    However, the belated return must be filed before the end of the relevant assessment year.
    For example, for FY 2019-20, the last date was March 31, 2021.

    Staying compliant with Indian tax laws is crucial for NRIs to avoid penalties and secure financial stability. Always stay informed and consult a tax expert if needed.