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Income Tax Returns- Corporates

A guide to tax implications for NRIs

Documents Required for Income Tax Returns - Corporates

  • 1 Copy of PAN
  • 2 Statements of all bank accounts in India (including Joint Accounts)
  • 3 Form 16 / Pension Certificate received
  • 4 Form 16A received from Bank against TDS on Fixed deposits
  • 5 Details of Investments made / Mediclaim (To claim Deduction or to lessen your tax burden)
  • 6 Details of Other Income Earned in India
  • 7 Details of Capital Gain (if you have purchased / sold an Indian Property)

Taxable Income of an NRI (Corporates)

Income from Salary

Your salary income is taxable when you receive your salary in India or someone does on your behalf. Therefore, if you are an NRI and you receive your salary directly to an Indian account it will be subject to Indian tax laws. This income is taxed at the slab rate you belong to.

Income from salary will be considered to arise in India if your services are rendered in India. So even though you may be an NRI, but if your salary is paid towards services provided by you in India, it shall be taxed in India immaterial of where you are receiving the income. In case your employer is Government of India and you are the citizen of India, income from salary, if your service is rendered outside India is also taxed in India. Note that income of Diplomats, Ambassadors are exempt from tax.

Ajay was working in China on a project from an Indian company for a period of 3 years. Ajay needed the salary in India to take care of the needs of his family and make payments towards a housing loan. However, since salary received by Ajay in India would have been taxed as per Indian laws, Ajay decided to receive it in China.

Rental Payments to an NRI (Corporates)

A tenant who pays rent to an NRI owner must remember to deduct TDS at 30%. The income can be received to an account in India or the NRI’s account in the country he is currently residing.

Maria pays a monthly rent of Rs30,000 to her NRI landlord. She must deduct 30% TDS or Rs 9,000 before transferring the money to the landlord’s account. Maria must also get a Form 15CA prepared and submit it online to the Income Tax Department.

A person making a remittance (a payment) to a Non-Resident Indian has to submit Form 15CA. This form has to be submitted online. In some cases, a certificate from a chartered accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a CA certifies details of the payment, TDS rate, and TDS deduction as per Section 195 of the Income Tax Act, if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature and purpose of the remittance.

Special Provision Related to Investment Income

When an NRI invests in certain Indian assets, he is taxed at 20%. If the special investment income is the only income the NI has during the financial year, and TDS has been deducted on that, then such an NRI is not required to file an income tax return.

What are the Investments that Qualify for Special Treatment?

Income derived from the following Indian assets acquired in foreign currency:

  • Shares in a public or private Indian company
  • Debentures issued by a publicly-listed Indian company (not private)
  • Deposits with banks and public companies
  • Any security of the central government
  • Other assets of the central government as specified for this purpose in the official gazette.

No deduction under Section 80 is allowed while calculating investment income.

Special Provision Related to Long-Term Capital Gains

For long-term capital gains made from the sale of transfer of these foreign assets, there is no benefit of indexation and no deductions allowed under Section 80. But you can avail an exemption on the profit under Section 115 F when the profit is reinvested back into:

  • Shares in an Indian company
  • Debentures of an Indian public company
  • Deposits with banks and Indian public companies
  • Central Government securities
  • NSC VI and VII issues

In this case, capital gains are exempt proportionately if the cost of the new asset is less than net consideration. Remember, if the new asset purchased is transferred or sold back within 3 years, then the profit exempted will be added to the income in the year of sale/transfer.

The benefits above may be available to the NRI even when he/she becomes a resident – until such an asset is converted to money, and upon submission of a declaration for the application of the special provisions to the assessing officer by the NRI.

The NRI may choose to opt out of these special provisions and in that case the income (investment income and LTCG) will be charged to tax under the usual provisions of the Income Tax Act.

Pension Income

All Inclusive Fee
Rs. 2360 Package Include
  • Income Tax Returns for NRI

Capital Gain on Sale of Property

All Inclusive Fee
Rs. 3540 Package Include
  • Income Tax Returns for NRI

Double Taxation Benefit

All Inclusive Fee
Rs. 4720 Package Include
  • Income Tax Returns for NRI