Taxation rules for Non Resident Indians (NRI)


Income earned by NRI outside India is not taxed in India. An NRI need not pay tax on the interest income in a non-resident external account( NRE) or foreign currency non-resident account.(FCNR).

There is no need to file income tax return if  NRI don’t have any taxable income here. However if the income in india through capital gains, rent, dividend or interest beyond the threshold limit( exempted limit) will have to file income tax returns. NRIs can save taxes by investing in pension plans, LIC and tax saving mutual funds, home loan repayment of principal and interest under relevant section of 80C and 24 are also allowed upto certain limits. Health insurance purchased by NRIs are also allowed as deductions upto Rs.35000 for self and family including parents.  Capital gains upto Rs.50 lakhs earned from selling a capital asset can be invested in bonds of NHAI or REC.

C.R. Venkata Ramani

(AICWA)

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