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Indian Income Tax Filing

What we Offer?
  • Income Tax Filing in India
  • Analysis of Double Taxation Agreements
  • Computation of Income on analyzing the Residential Status
  • Accurate disclosure in Return to ensure set-off and Carry forward of losses
  • Utilization of Foreign Tax Credit.

A person is said to be “resident” in India in any previous year if he
  • Is in India in that year for an aggregate period of 182 days or more; or
  • Having within the four years preceding that year been in India for a period of 365 days or more, is in India in that year for an aggregate period of 60 days or more.

The above provisions are applicable to all individuals irrespective of their nationality. However, as a special concession for Indian citizens and foreign citizens of Indian origin, the period of 60 days referred to in Clause (b) above, will be extended to 182 days in two cases: (i) where an Indian citizen leaves India in any year for employment outside India; and (ii) where an Indian citizen or a foreign citizen of Indian origin (NRI), who is outside India, comes on a visit to India.

Who is liable to file Tax Return in India?

Scenario 1 (Basic Exemption Limit)

Mr Rahul is an Australian Tax Resident and a Non-Resident Indian. He has Rental Income and Interest

  • Rental Income for FY 15-16 ( 20000*12 ) 2,40,000
  • Bank Interest Income 20,000
  • Total Income2,60,000

Mr Rahul though being a Non-Resident Indian has to file his Income Tax Returns in India for he is receiving Income from India which is exceeding Rs 2,50,000/- i.e Basic Exemption Limit.

Scenario 2 (Slab Rates for Non-Residents)

Mr.Rahul is an Australian Tax Resident and a Non-Resident Indian aged about 65 years. He has Rental Income and Interest Income from Bank Account in India. The following are his Income Details:

  • Rental Income for FY 15-16 ( 22500*12 ) 2,70,000
  • Total Income 2,70,000

Mr Rahul is of the opinion that since his Total Income is below the Slab Rates for Senior Citizens in India, he is not supposed to file his Tax Return in India.

Whereas, A NRI falls under the Slab Rate of Rs 2,50,000/- irrespective of his age. Thus, Mr Rahul has to file his Income Tax Return in India.

Scenario 3 (Bank Account in India)

Mr Rahul is an Australian Tax Resident holding NRO(Non Resident Ordinary) Account in India. The tax deduction on NRO account In India is at a maximum rate of 30%.

Suppose, Mr Rahul receives Rs.150000 interest income in his NRO Account, and TDS(Tax Deducted at Source) is Rs 150000*30%, ie 45000.

Mr Rahul assumes since his Total Income in India is only Rs 150000 and this being less than the Basic Exemption limit, he is not liable to file any return in India.

In the above scenario, Mr Rahul is clearly losing out by not filing his return In India. On filing his return, Mr X will be able to enjoy a refund of Rs 45000.

Scenario 4 (Capital Gains)

Mr Rahul, is an Australian Tax Resident and is the single owner of 2 properties say Building 1 and Building 2.

Mr Rahul in the financial year 15-16 sold both these properties. Thereon, he incurs loss on Building 1 and incurs gain on Building 2.

The buyer of Building 2 deducts Tax at source, whereas in reality Mr Rahul is in fact not liable to any tax because he can set off his Capital Gain with the Capital Loss incurred.

Mr Rahul surely will have to file his Tax returns to claim refund, if applicable.

Scenario 5 (Set off of Losses in Subsequent year)

Mr Rahul is an Australian Tax Resident and incurs Short term capital loss on Sale of investments in India. He can set off such loss in subsequent years provided he has filed the returns in India in that particular year of loss.

Scenario 6 (Capital Gain & Roll Over Deductions)

Mr Rahul is an Australian Tax Resident and is the single owner of Building 1. During the FY 15-16, Mr Rahul sells Building 1 and gains on this Capital Asset.

The buyer of the property deducts tax at applicable rates.

But, Mr Rahul is availing Roll-Over deductions in India and thus his taxability is NIL. Now, Mr Rahul cannot lose out on the tax already deducted by the buyer. Hence, Mr Rahul has to ensure filing of his returns for the FY 15-16 on time to receive the refund from the Tax Department