Filing Return of Income in India

What is ROI?

Ans. ROI is an Income-tax Form in which an Assessee reports information about his / her income and tax thereon to Indian Income Tax Department. The Act provides for Assessees who are required to file ROI and same is required to be filed within prescribed due dates and in a prescribed manner.

When is a NRI compulsorily liable to file ROI in India?

Ans.

An NRI has to compulsorily file his ROI in India when:
i. Taxable income in relevant FY (April to March) exceeds Basic Exemption Limit i.e. Rs. 2,50,000/- for FY  2018-19; or

ii. Where total income is less than Basic Exemption Limit but it consists of:
STCG on Equity Shares/ Units of Equity Oriented Mutual Funds/ Units of Business Trust
Any LTCG chargeable to tax
Incomes which are chargeable to tax irrespective of the Basic Exemption Limit

(ROR having assets / signatory authority outside India or has beneficiary interest in any asset outside India is mandatorily required to file ROI even if their income is below the taxable limit).

What are benefits for filing ROI voluntarily?

Ans.

It is advisable to voluntarily file ROI in India due to the following reasons:
i. To claim refund of excess TDS, along with interest@ 6% p.a. 

ii. To be eligible to carry forward losses to be set off against future incomes, if any

iii. To claim benefit of lower tax under DTAA, if applicable

iv. The updated tax information/ records help NRIs
To comply with procedural documentation for repatriation of income and assets from NRO a/c to NRE a/c / Overseas a/c.
Have ready records as and when he / she returns to India or have to submit the said documents in his/her country of residence.

What is the due date applicable to NRI for filing his ROI?

Ans. A NRI is required to file his ROI for every FY by July 31 immediately succeeding the FY. However, in the following two situations, due dates will be as mentioned below:


Situations

Due Dates

NRI’s personal a/cs or a/cs of the firm wherein he is a working partner are required to be audited under any Indian laws.

September 30 immediately succeeding the FY

Transfer Pricing Provisions Applicable

November 30 immediately succeeding the FY

Whether a NRI can file his ROI beyond the above prescribed due dates?

Ans.

Yes, a NRI can file his ROI even after the prescribed due dates (specified in FAQ d. above). The belated ROI can be filed within a period of 1 year from the end of the FY for which the belated ROI is to be filed.
For e.g. Belated Return for FY 2017-18 can be filed upto March 31, 2019. 
Further, if NRI intends to file ROI after the due date for filing Belated Return is passed (in order to claim refund of excess taxes paid), he/she may make an application with Income Tax Authorities to condone the delay and accept delayed ROI. However, same can be done only when there is valid reason for such delay.

Whether a NRI can revise the ROI previously filed?

Ans.

Yes, if an individual discovers any omission or wrong statement in ROI previously filed he/she may file a revised ROI within a period of 1 year from the end of the FY for which the ROI is filed.
For e.g. ROI filed for FY 2017-18 (whether filed within due date or belated) can be revised upto March 31, 2019.

What are the tax slab rates applicable to a NRI?

Ans. The tax slab rates applicable to NRI are as follows:


Particulars

Income Tax Rates

Health & Education Cess

(w.e.f.FY 2018-19)

Upto

Rs. 2,50,000/-

Nil

Nil

Rs. 2,50,001/- to

Rs. 5,00,000/-

5% of (Total Income – 2,50,000)

4% of Income-tax and surcharge*

(if applicable)

Rs. 5,00,001/- to

Rs. 10,00,000/-

Rs. 12,500/- + 20% of (Total Income – 5,00,000)

4% of Income-tax and surcharge*

(if applicable)

Above

Rs. 10,00,000/-

Rs. 1,12,500/- + 30% of (Total Income – 10,00,000)

4% of Income-tax and surcharge*

(if applicable)


*In addition to the above, surcharge @10% shall be levied for taxable income between Rs. 50 lakhs to Rs. 1 crore and 15% for taxable income exceeding Rs. 1 crore.

What are the consequences of not filing the ROI within the prescribed due dates?

Ans.

If a NRI does not file his ROI within prescribed due dates, then he shall be liable for the following:
i. Interest @ 1% per month or part of the month on the tax payable, if any for delay in filing ROI. 

ii. Fees for filing ROI after due date shall be levied as under (depending on total income during the FY, (w.e.f. FY 2017-18):

Particulars

ROI filed upto 31st December

ROI filed after 31st December

Income < Rs. 5 lacs

Rs.1,000/-

Rs.1,000/-

Income = Rs. 5 lacs

Rs.5,000/-

Rs.10,000/-


iii. In case of willful delay in filing ROI, NRI may be subjected to prosecution. Provided no  prosecution for failure to furnish ROI, if:
ROI is filed within a period of 1 year from the end of the FY 
Tax payable by NRI on total income determined by the Tax Officer as reduced by Advance Tax paid, if any and TDS does not exceed Rs. 3,000/-,i.e. his / her balance tax liability after considering TDS and Advance Tax does not exceed Rs.3,000/- 

iv. Further, refund cannot be claimed unless condoned by Income Tax Authorities as specified in FAQ e. above.

Whether foreign assets are required to be shown in ROI by a NRI?

Ans. No, NRI is not required to submit details of foreign assets owned by him while filing ROI in India.

Whether husband and wife can file ROI jointly?

Ans. No, husband and wife cannot file ROI jointly in India. As per the provisions of the Act, every Individual is a separate assessee and he / she is required to file the ROI based on the total taxable income earned by him / her during a particular FY. 

What is an Assets and Liability (AL) Schedule? Who is required to report the value of Assets under AL Schedule in India?

Ans. AL is a Schedule of the ROI which is required to be mandatorily filled by Individuals and HUFs, if their total income exceeds Rs. 50,00,000/- in a FY. The said Schedule requires reporting of specified Indian Assets and corresponding Liabilities at the end of the year.

Which Assets and Liabilities are required to be reported under the AL Schedule?

Ans.

The Asset and Liabilities required to be reported have been categorized as follows:

I. Assets:
A. Immovable Assets:
Land 
Building 
B. Movable Assets: 
Jewellery, Bullion etc.
Archaeological collections, drawings, painting, sculpture or any work of art  
Vehicles, yachts, boats and aircrafts
Financial Assets 
i Bank (Including all deposits)
ii Shares and Securities
iii Insurance Policies
iv Loans and Advances Given
v Cash in hand
II. Liability in relation to the above Assets (both Immovable and Movable)

Are there any penal consequences for non-reporting / mis-reporting of Indian Assets in the AL Schedule under the Act?

Ans. Presently, there is no penalty applicable for non-reporting / mis-reporting of Indian Assets in the AL Schedule.  However, the Income Tax Assessing Officer may initiate prosecution proceedings for incorrect reporting, if any, in the ROI.

Who is required to report Foreign Assets in India under the Foreign Asset (FA) reporting schedule?

Ans.

All RORs, including Returning Indians qualifying to be ROR in India during the relevant FY are required to mandatorily report their Foreign Assets in the ROI. 

Foreign Nationals who qualify as ROR in India on Employment, Business or Student visas are not required to report Foreign Assets acquired by them during those FYs in which they were Non-Residents of India, provided that they are not deriving any income from such Assets during the relevant FY. 

For e.g. – If a person had invested in Shares in a FY in which he/she is a Non-Resident of India and there is no dividend / other income received from those Shares in the FY when he/she is a ROR, the same is not required to be reported in the ROI for such FY.

What are the Assets to be reported under FA schedule?

Ans.

As per the FA schedule provided in the ROI, the following Foreign Assets held as a Legal owner / Beneficial owner / Beneficiary are to be reported:
i. Bank Accounts
ii. Financial Interest in any entity
iii. Immovable Property
iv. Bank Account, in which you have a signing authority
v. Trusteeship / Settlor / Beneficiary in a foreign trust
vi. Other Capital assets – does not include personal assets
vii. Other Foreign Income not associated with the assets reported above

Is there any threshold limit for reporting of Foreign Assets in the ROI?

Ans. There is no threshold limit on Income or Asset Value for reporting of Foreign Assets in the ROI.