Taxability of Income of Non -Resident Individuals (NRIs)

Income Tax liability is dependent on the residential status of a person. Based on residence, a person can be Resident and Ordinarily Resident, Resident and Not Ordinarily Resident or Non-Resident. Non-Resident is also known as NRI (Non- resident Indian).

If an individual who satisfies understated both the conditions of the Income-tax Act, 1961 then he becomes a Non-Resident.

1. He is not in India for 182 days or more during the relevant previous year, and

2. He is not in India for 60 days or more during the previous year and he is not in India for 365 days or more during the 4 years prior to the previous year.

But, in case where a person leaves for employment or where a resident who leaves India as a member of Crew of Indian ship or where an Indian Citizen who is abroad comes to India for a visit, the period of stay would be 182 days instead of 60 days in the previous year as per above point (2).
The following incomes of a ‘non-resident’ are taxable in India –
• The income which is received or deemed to be received in India by him or on his behalf, and
• Income which accrues or arises or is deemed to accrue or arise in India during the previous year.
Tax savings options are also available to NRIs as per the Income Tax Act, 1961. The following are some Tax Saving Options available for NRIs.

• Deduction u/s 80C :
a. Life Insurance and Retirement/Pension
b. Investment in House property – Deduction of both principal amount payment of loan and interest on loan as per Income tax provision as well standard deduction is available.
c. ELSS (Tax saving Equity Mutual Fund schemes)

• Deduction u/s 80D – Health Insurance Premium

• Deduction u/s 80G – Donations made to certain specified charitable institutions are only eligible to claim deduction under this section.

• Deduction under 80E

Tax rate and slab applicable to an NRI will be same as applicable to any other individual (other than resident women and resident senior citizen) or in other words, we can say as per the Income Tax Act, 1961 NRIs fall under the category of other individuals and tax slab and rate applicable to other individual will be applicable for NRI as well.

Tax Returns for Financial Year 2010 -11 (March 2011) has started. Request you to please visit or mail us Form16/ Salary Certificate and details of other income, at . We would take it from there to file your return of income. provides complete online taxation solutions for individuals ( Tax Returns + Tax Support + Tax Planning ) – please see this – Services Offered. Providing Complete Online Tax Solutions for Individuals, Not Just Returns .

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