NRI Taxation

NRI Income Tax Return Services in Gujarat by L & C TechFin Advisory Pvt Ltd

Understanding NRI Taxation in India

The taxation of a Non-Resident Indian (NRI) depends on their residential status in a given financial year. If an individual qualifies as a Resident, their global income is taxable in India. However, if they are classified as an NRI, only the income earned in India is taxable.

Examples of taxable income in India for NRIs include:

• Salary earned in India for services rendered within the country

• Capital gains from property or asset sales located in India

• Rental income from house property in India

• Interest earned on Fixed Deposits (FDs) and savings accounts in India (NRO accounts are taxable, while NRE and FCNR accounts are tax-free)

Why NRI Taxation Matters?

Many NRIs have families, investments, or financial interests in India. Whether they send remittances, invest in real estate, or maintain savings, it is crucial to comply with Indian tax laws to avoid penalties and optimize tax savings.

Key Provisions for NRI Taxation

Income Tax Liability of NRIs

• NRIs are required to pay income tax in India only on the income earned within the country.

• The income earned outside India is not taxable under Indian law.

• Interest earned on NRO accounts is taxable, while interest from NRE and FCNR accounts is exempt.

• NRIs must file an income tax return (ITR) if their total taxable income in India exceeds INR 2.5 lakhs in a financial year.

• TDS (Tax Deducted at Source) applies to most NRI income streams, such as rent, interest, and capital gains.

Exemptions and Deductions Available for NRIs

NRIs can claim certain deductions to reduce their taxable income:

1. Section 80C:

   • Life Insurance Premium payments

   • Tuition fees paid for spouse or children

   • Repayment of principal on home loans

   • Investments in ULIPs

2. Section 80D:

   • Health insurance premium for self, spouse, children, and parents

   • Preventive health check-up deductions up to INR 5,000

3. Section 80E:

   • Interest paid on education loans (for self, spouse, or children)

   • Deduction available for up to 8 years or till the interest is fully paid

4. Section 80G:

   • Donations to eligible charitable organizations

5. Section 80TTA:

   • Deduction of up to INR 10,000 on savings account interest

Restrictions for NRI Investments

While NRIs can invest in various financial instruments, certain investments are not allowed:

• National Savings Certificates (NSC)

• Post Office Savings Schemes

• Public Provident Fund (PPF) – NRIs cannot open new PPF accounts

• Senior Citizen Savings Scheme

Income Tax Slabs for NRIs (FY 2023-24)

Note: New tax regime is optional.

Important Sections Under NRI Taxation Laws

• Section 115D – Computation of taxable income for NRIs

• Section 115E – Tax on investment income and long-term capital gains at 20%

• Section 115F – Exemption on capital gains reinvested in certain assets

• Section 115G – Exemption from filing ITR under specific conditions

• Section 115H – Special benefits when an NRI becomes a resident

• Section 115I – Option to be taxed under normal provisions

How L & C TechFin Advisory Pvt Ltd Can Help?

Our team of tax professionals, CAs, and legal experts in Gujarat ensures seamless tax filing and advisory services for NRIs. We provide: ✅ Accurate Tax Filing – Error-free ITR filing for NRIs ✅ Investment Advisory – Tax-efficient investment planning ✅ TDS Compliance – Assistance with TDS refunds & exemptions ✅ Real Estate Taxation – Capital gains and rental income tax solutions ✅ Compliance with FEMA & RBI Norms – Legal compliance for NRIs

Get Expert Assistance Today!

Navigating NRI taxation can be complex and time-consuming, but with L & C TechFin Advisory Pvt Ltd, you can stay compliant and maximize your tax benefits.