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NRI Frequently Asked Questions And Answers

NRIs have many questions & at least I haven’t found a single source where they can get all the answers – and then I started WiseNRI. I keep getting a lot of questions from NRI clients & blog readers so I am sharing most frequently asked questions by NRIs.

You can also ask questions in the comment section.

NRI Questions And Answers

NRI Questions And Answers

1) I am an NRI. How can I e-file my tax returns?

As an NRI, if you earn income in India and it exceeds Rs.2,50,000, you are liable to file tax returns. You can file your returns online. The process is as follows –

Register on the Income Tax India Website

Choose the correct ITR form.

You can e-file your returns or download the relevant ITR complete and upload it.

Verify the ITR-V. It can be verified by printing it out, signing it and sending it via normal post or speed post to CPC Bangalore within 120 days of submitting the form. The address is –

Income Tax Department – CPC

Post Box No – 1

Electronic City Post Office,

Bangalore – 560100, Karnataka

You will get an acknowledgment on receipt of the form.

It can also be verified using a digital signature.

2) Can I buy real estate in India as an NRI? Are there any restrictions?

There is no restriction on NRIs for buying residential or commercial properties. But NRIs cannot buy agricultural land or plantation property or farmhouses in India. NRIs can avail of loans for purchase of real estate and are provided the same tax benefits that are provided to Resident Indians for purchase of property.

3) I will be sent abroad for an assignment/project for a short-term. How will my income be taxed?

Going abroad on assignments and projects are exciting. You get to work with people from a different culture and you get the opportunity of visiting a new country. Usually people get a tidy sum which can be added to the savings. If the assignment is for a duration of 3 months to one year, you will get your salary in India and an allowance.

If you stay in India for 60 days or more, the salary and the allowance is taxable unless the allowance is paid for expenses incurred above and there are valid receipts for the same.

If you go abroad on a long-term assignment which means the duration is one year to three years, then you are on the payroll of the company unit abroad. During this assignment, if you stay in India for less than or equal to 182 days, you will not pay tax on income received abroad. If you stay in India for more than 182 days, you will be liable to pay tax on the income received abroad.

If you pay taxes abroad, you will have to check if you can avail tax concession or exemption under DTAA.

NRI Questions

4) As an NRI, what are some of the investments that I can make in India?

You can invest in equity shares and mutual funds. But you cannot short sell or be involved in intraday trading. You can invest in fixed deposits in FCNR deposits and  NRE accounts. You can also invest in real estate, gold etc. Investments in bonds issued by Government of India, public companies and private companies are also permitted. If you think you will retire in India, you can invest in National Pension Scheme (NPS) too.

5) I am an NRI. Can I transfer the proceeds of the sale of property received to the country I currently reside in?

If you purchased the house when you were a resident Indian, then the sale proceeds need to be credited to the Non Resident Ordinary (NRO) Account.

If the property was purchased out of income earned in India or using a home loan taken in India and sold when you are an NRI, the amount must be credited in the NRO account.

If the house is purchased by using funds earned abroad, then the repatriation can be only till the extent of the funds used for purchase. The excess sale consideration over the amount paid in foreign exchange can be remitted out of NRO account subject to USD 1 million per financial year per person. This is limited to sale of two such properties.

6) When do I not need to file an Income Tax Return?

As an NRI, if you have invested in certain assets and TDS has been deducted and you do not have any other income except the income earned in these investments, you need not file tax returns. The assets applicable to this rule are –

  • Shares in a public or private Indian company
  • Debentures issued by a publicly-listed Indian company
  • Deposits with banks and public companies
  • Investment options of the central government

7) Should I disclose my foreign bank accounts while filing taxes?

It is not mandatory for NRIs to disclose the details of their bank accounts in the country of residence when they file tax returns. You can mention the details of the bank account in India so that the refund if any can be transferred there.  If you do not have bank account in India you can give the details of the foreign bank account so that refund can be remitted to you.

8) How can I make an Aadhaar card?

A circular issued on November 15 by Dr Ajay Bhushan Pandey, CEO of the UIDAI, has directed federal ministries and departments to issue directives to state governments and other relevant agencies that NRIs are not eligible to apply for an Aadhaar card.

Few of the above questions are answered by Vidya – she is an NRI.

If you have any Questions related to NRI status – feel free to add in the comment section.

About the Author

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning".

  • sonu patel says:

    Official procedure to withdraw matured PPF amount at concerned post office of NRI without his presence in India when even Special Power of Attorney is not considered by authority.

    • Hemant Beniwal says:

      Hi Sonu,
      I am not sure about this but POA should be considered. If it’s in post office – try RTI 🙂

  • KS says:

    As I have rental income of 15k/month which is 1.8L/annum, then in that case I don’t need to file return?

    • Hemant Beniwal says:

      Hi KS,

      Yes, no need to file returns.

  • A.MOHAN says:

    Hi hemant.

    It is very nice of you to furnish so much of pertinent details that will help many NRIs to comply with GOI regulations. TY for this yomen service.

    My question to you,sir:

    My daughter bought a property in India in 2007 out of funds earned abroad. She was NRI at that time. Now she has become a USA citizen with PIO status. The information with regard to tax and repatriation of funds given in your blog- is it still applicable if she sells her property now, being a PIO?

    I will appreciate a post from you please.

    Regards,

    A.Mohan

  • Mahdiya says:

    If I get inheritance in India .. I am an nri … what are my options to save on the 33 percent tax ?

  • Veej says:

    I understand that by adjusting the purchase price of a property in India using cost inflation index (CII), one can decrease the amount of long term capital gains (LTCG) taxes paid in India. Let’s say the original property purchase price is X, and adjusting for CII, the effective price is Y.

    Let’s say the property sale price is Z. This means that property taxes in India are based on LTCG of (Z-Y).

    I am a US citizen. I understand that US residents need to pay taxes on worldwide income including LTCG for property sale in India, but the amount can be offset by taxes already paid in India.

    My question is: Is the federal LTCG tax owed in the US computed based on (Z-Y) or (Z-X)? How about state taxes for the state of California – is that based on (Z-Y) or (Z-X).

    • Hi Veej,
      I missed replying this – I think a US tax consultant will be the right person to answer.

  • Kushal Verma says:

    Hello. I am an NRI based out of Dubai and I loaned INR 20 lakhs (through a cheque cashed on my NRE account) to my cousin, residing in India, in Dec 2018. He shall be returning the same to me in Jan 2020. Will I be taxed on the 20 lakhs when he returns it to me? Thank you

    • Hi Kushal,

      You will not be taxed on loan amount but income tax department may ask if you have earned any interest on that.

  • Jagdish says:

    It would be desirable if you publish similar questions and answers for people who have opted for citizens of a foreign country and have OCI card. They come to India to stay for a period of six months or a year and go back.

  • Shekhar says:

    I am an NRI and had obtained Aaadhar card during my India Visit when there was no clarity as to how NRIs can obtain it or whether they are eligible . Now what do i do with my current Aadhar card ?

  • Ramesh says:

    I am in USA right now and shall remain upto Sept 19 end. I have to file IT return by 31st July. I requested my indian banks to send me form 16A on my regisered email with them. They are not responding, even after sending so many reminders. Whom should I approach to report the neglency of banks. I found Banks are not tuned to work on net-banking properly

  • Selvaraj says:

    Hello,
    I love your site! It has so much information for NRIs.
    I have a question about selling a house in India.
    In order to use DTAA, I am planning to obtain Tax Residency certificate from USA. I would like to know the process involved and also what other documents I need to get.
    Thanks.

  • Satish says:

    Please let me know NRI senior citizen exemption limit for the FY 2018-2019 and for FY 2019-2020

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