Should NRI file Income Tax returns in India ?



If you are an NRI, are wondering whether you need to file Income Tax returns in India, this post will help you . Any Income which accrue or arise in India, wil be taxable in India. For e.g common income which are taxable in India are – Bank Interest, Fixed deposit Interest, Profilt / Loss from Shares, Mutual Funds, Bonds, Rental Income, Profit / Loss from Sale of Property in India etc.

 When an NRI should File IT Returns in India?

As an NRI, you should file your income tax returns in India,  if you meet any of the following criteria –

1) Your taxable income in India during the year was above the basic exemption limit of Rs 2 lakh    OR

2) You have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit. (like Shares, mutual funds, property etc)   OR

3) If you need to claim Refund for TDS deducted more than actual tax laibility OR

4) If you have Income from House property & claiming Interest oh Home Loan and there is a Loss from “Income under House Property” and you need to adjust this loss against other income or carry forward.

 Important Points to Note

  • NRIs do not get the benefit of differential exemption limits on basis of age or gender that is available to Resident Indians. The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents.
  • For NRIs, certain short term or long term capital gains from sale of investments or assets are taxed even if the total income is below the basic exemption limit.

Are there any exceptions?

Yes, there are two exceptions:

  • 1) If TDS is already Deducted –   If your have investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax returns.

BUT if the TDS is deducted more than actual tax liability, then you need to file IT return & claim Tax refund.

  • 2) Tax free Income :  If you have long term capital gains from the sale of equity shares or equity mutual funds, you do not have to pay any tax and therefore you do not have to include that in your tax return

File IT Return to Claim TAX REFUND

If the tax deducted at source is more than the actual tax liability, you may also file Income tax return & claim refund.

For e.g. If  your taxable income for the year was below Rs 2 lakh but the bank deducted tax at source on your interest amount, you can claim a refund by filing your tax return.

Also, if you have capital loss that can be set-off against capital gains and TDS was deducted on the capital gains, but you can set-off (or carry forward) capital loss against the gain and lower your actual tax liability

In such cases, you would need to file a tax return.

Which IT Form is applicable for NRI

  • ITR 1 – If you just have Interest Income
  • ITR 2 – If you have Income from Capital Gains (buy/sell of shares, mutual funds properties etc)

What is the best way to file your returns?

There are 3 ways in which you can file your tax returns.

Do it yourself for FREE

You can do it yourself using Income Tax department Online Tax filing portal. It provides a free method to upload your tax return online.  File your return online & download the acknowledgement, Sign it & send it to IT dept within 120 days

Read the post on – How to file Income Tax return online for FREE

Tax Filing Websites

There are many online portals which provide service to file returns, They also offer professional help in filing the returns.

Go with your Chartered Accountant

Get help from your trusted CA to file the returns.


How NRIs can save Tax on Income generated in India

  • by investing in eligible investments under 80C (limit Rs 1 Lkh) – Read Full Post
  • by taking health insurance policy in India for themselves, their family and dependent parents , and claim deduction up to 35,000 for the annual premium paid.(Section 80D)  Read Full Post
  • by investment in Capital gains Bonds (NHAI or REC) to save capital gain tax on property


Other Important Posts for NRI related to Best Exchange Rates, NRE FD Rate Comparison, NRI PPF Rules , NRI Bank Accounts etc.

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  1. Hi Vivek, thanks for the blog.i have touch based with you in past over another NRI blog.

    Kindly can you provide your views and guide on below situation with possible way forward to save tax on interest earned.

    1 i have got an NRE Indian rupee account. My current status is Residant Indian (RI), i need to travel overseas for work purpose

    2 When i am in India my NRE account status shall change to Residant Indian as per Bank and rules of RBI

    3 Assuming above is true what happens to my investment in NRE account (Fixed deposits), will they be taxable ?

    4 its a pretty surprising law, if a individual is outside India, then FD’s interest is not taxable and if in India then its taxable ?

    • Hi, When you become a Resident Indian, then you need to notify that to your bank. They will either close your NRE FD or convert the NRE FD into resident FD. Any interest earned in Residnet FD is taxable.

      Yes, NRE FD Interest is tax free in India because government is giving incentive to NRI to send their money in India.

  2. Hi Vivek

    Just needed a clarification:

    So unless your income is 2 lacs, you don’t need to do anything whatsoever? No need to file anything? And this is for both NRIs and residents?

    • For residnets, you need not file return if below exemption limt of rs 2 alkhs.

      But for NRI, you need ot file return if you have taxable long term or short term capital gain. even if income is below Rs 2 lakh

  3. I am an NRI. I have sold some shares in Fy 2013-14. These is a short term capital gain in shares and long term capital loss in Gold ETF.
    Can you please confirm:
    1) which section of schedule CG is applicable for me.
    2) Is it possible to set off short term capital gain with long term capital loss.
    3) Do I need to pay any taxes because of short term capital gain even if total income including all sources are less than 2 Lacs.

    Would Appreciate your quick response. Thanks you very much !!

    • Hi Prashant,

      1) You need to fill CG – A2 & B3 Section
      2) No you cannot set off STCG with long term loss
      3) Yes you need to pay taxes as limit of 2 lakh doesnot apply to non-residents

      • Hi Vivek,

        Many Thanks for your response !!

        Can you please answer my following queries as well. Would Appreciate your quick response.

        1. For NRIs chapter VI-A deductions are applicable or not, As in ITR2 form, In sheet PartB- TI-TTI-SAL 11th row, it is not taking the benefits for chapter VIA- 80C etc even though I have given details in schedule VI-A
        2. Is it required to include NRE Bank account interest and NRE Fix Deposit interest. If yes which schedule and section.
        3. In Schedule CG, for LTCG the purchase price to be taken without index or with index.
        4. Last Year I have shown loss from house property, Can I set off this in CYLA-BFLA sheet for remaining income amount. If yes then how?
        5. In Schedule CFL, I have entered last year house property loss, is it ok? My Last year ITR is not fully processed yet.


  4. Dear Sir,

    I am a NRI and I do not have taxable income in India more than Rs 2 lakhs but I have three houses in my name two in Bangalore city, one in Tamilnadu. All the three houses are NOT LET-OUT and income from these houses is NIL. Actually I spend money to maintain the houses like cleaning, watchman, gardening etc.. I would like to know whether I need to file IT returns or not. I dont have any shares or any other investments. Only some NRE FDs I have. I would appreciate if you can advise me regarding this.

    • Hi Rabindran,

      Even if the houses are not let out, it will be deemed to be let out ( 2 houses) . And 2 houses will be treated as ‘deemed to be let out’ and the estimated annual rent will be considered as the taxable value.

      However, you can claim following deductions:

      1) Municipal taxes paid: if the municipal taxes have been paid in the current year.

      2) flat standard deduction of 30% from the annual value for expenses incurred such as repairs and maintenance of house property, insurance, etc.

      3) Interest on housing loan: Actual interest paid without any limit.

  5. Hi Vivek,

    I am a NRI from last 3 years, i dont have any nri r nre account in india, i do have 2 savings account in 2 banks, i used to transfer around 30 to 40 thousand to banks monthly, if this money is taxable?

    • Hi Santhosh,

      the money which you transfer is not taxable. But any interest earned in that account will be taxable.
      But Interest in NRE Account is tax free.

      Also, if yuou have moved abroad for long duration, you should open an NRE Account.

  6. Dear Sir,

    From last four years, I am working outside India and not having any source of Income in India.
    I am sending my Savings to my NRE account in India,
    Do I have to submit Income tax return form with Bank Statement ?
    Is there any issue if I spend my NRE savings in any asset purchase back home in India

    • Hi Sandeep,
      As NRE Interest is tax fre, you are not required to submit IT return in India.
      There is absolutely no issue in buying property from NRE Account. This is the most common option for NRI.

  7. Dear Sir / Madam,

    Advise about section 90 DTAA.

    I am NRI, resident in Europe where there is a DTAA treaty in force between my country and India.

    For the assessment year 2014-15 I have filed my income tax return in India.

    During this year I have only had salary income, and no other income. In Europe, I have paid income tax for the year. Lets assume it is INR 100.

    While submitting my return in India the tax calculator obtained a number as my tax liability to be (assume) INR 92.

    How can I apply to the Income Tax Department, CBDT that since I have already paid my income tax for the year I do not need to pay AGAIN this income tax in India?


    • Hi,
      1) It will depend on your residnetial status in India. Since when you are outside India ?
      2) If you are a Non-resident in India, any salary earned abroad is not required to show as Income in Indian IT Return.
      3) If your status is Resident in India for AY 2014-2015, then you need to file return in ITR 2 and fill schedule FSA & Schedule TR & Schedule FA. You can claim tax relief for the tax paid outside india by filling details in above schedules while filing IT return.

  8. Hi Vivek,

    I am working abroad since May 2013. I don’t have any taxable capital investments or any housing property in India. My only source of income in India for 2013-14 was Interest (bank interests and from FD/RD) and a small amount transferred by a non-relative the total of which is less than 2 Lacs. However, i have frequently transferred money back to India to a Savings Account and a NRO account.
    In this scenario, do I need to file IT returns in India ??


    • Hi Rishav,

      if your interest income is less than Rs 2 lakh, you are not required to file returns in India.

      However, it Bank has deducted TDS on Interest earned, you should file return online & claim refund.

  9. Hi Vivek,

    I am presently a NRI. I had bought some equity shares of listed Indian companies when I was a resident Indian. My queries are as:

    1. The dividends that I receive from my equity shares ( which I bought as a resident) are they taxable?
    2. Are long term capital gains from equity shares ( which I bought as a resident) taxable.



    • 1. Any dividend received from Shares is TAX FREE ( irrespecitve of residential status)
      2. If you sell after 1 year (Long term capital Gain) – the LTCG on Shares is NIL. So it is NOT TAXABLE.

  10. Dear Vivek

    Thanks for your valuable inputs.
    I am a NRI and transferring my funds to NRE account. Normally i transfer some funds from NRE to NRO account from where I am sending it to my parents for their routine expenses. I bought a property and the funds were transferred from NRE Account, which I believe is absolutely fine. My question here is that since NRE interest income (both savings and FD interest) is exempted and I get some interest on NRO account which is very minimal due to the fact that I keep very low balance, do I need to file ITR.


    • Hi Pankaj,

      There may be a possibility that TDS is deducted by bank on your NRO Interest. If the amount is substantial, you can file return & claim the refund.
      Otherwise, there is no need to fiel the returns.

      Also, NRO account should be mainly used for any income generated in India e.g rent etc. You can transfer money to your parents directly from NRE account. For that you donot need to transfer the money to NRO.

      Which bank do you use for NRE & NRO. How is your experience with them?

  11. I am an NRI for the last 3 years. Last asst year i,e 2013-14 I have filed the return but got a demand notice.I have revised the return in ITR2 and submitted under the option rectification of mistake. Again my salary earned abroad has been taxed and demand raised by the IT dept.I do not know how to deal with the matter. Please advise

    • Hi, Could you pls provide more details as If you are NRI , any foreign salary cannot be taxed in India.

      What income did you show & under what head. How much tax did you paid.?
      How much is demand notice and for which income etc ?

  12. I was posted to Bangkok (Thailand) on official duty on temporary basis from 02.6.14 and returned to India on 21.7.14.
    Now I am again transferred to Muscat (Oman) for 3 years posting and shall proceed on 09.10.2014.
    In between I shall be visiting India from 24.12.2014 to 1.1.2015.
    What will be my tax liability in India as my stay outside India is more than 182 days in total for FY 2014-15(AY 2015-16) as the stay outside India is intermittent (not continuous for 183 days), but exceeds 183 in total.
    Can I claim refund for the excess amount deducted at source by my employer my means of IT return ?
    Or I have to pay tax on the total income for the relevant year. Do I have to file ITR ?

    • Hi Hirak, As youa re out of india for more than 182 days, and you left India for employment outside India, you will be treated as NON-resident in India for taxation purpose.

      As a non -resident, you only need to show your Income in India. So you should file your return in India showing the salary received in India for FY2014-2015. You can then claim the TDS deducted by your employer as well.

      You need to calculate the tax amount on your India income and then check if the TDS deducted as more or less. Accordinly, you need to either pay tax or claim refund.

  13. I am planning to go abroad as Permanent Resident with my spouse and minor child. How much money can we take when we go abroad as Permanent Resident from my FD deposits in India.
    Also, can we open an NRE & NRO account before we travel ?

    • Under the RBI Liberalised Remittance Scheme (LRS), you can transfer upto USD 125000 (approx. Rs 75 lakh)

      You can convert your existing account ot NRO account if you show your passport & VISA to bank official.

      Once your normal account becomes NRO account, you can send upto USD 1 million from NRO to NRE Account.

  14. Hallo Mr. Jain,

    I am little confused with some contradictor statment on intererest earned on NRE FD deposited. I have a one simple question, let’S take a exampe, if I do a NRE FD for 1,000,000 INR and for 2 years, and at the endof tenure total maturity amount is 1,190,000 INR, that means I earned 190,000 INR. should this be free from Tax , as this is NRE FD amount or shall I need to pay 10% of this , means 19,000 INR to tax.

    Please clarify.

  15. 1) I was maintaining NRI status from 2004 to 2013
    2) In the year 2011 I had booked a house by making a Chq payment of Rs.12 lakh from my NRE Ac.
    3) Now The builder has failed to give me that house and returned Rs 14 lakhs by chq in Aug, this year.
    4) Do I have to pay any tax on this refunded money ?

    • Hi Dilip, As it is capital receipt, this is not subject to tax.
      However, the interest of Rs 2 lakh will be taxable on accrual basis.

  16. Hi Vivek,

    I have moved to Australia in March 2013 but have not converted my resident saving accounts to NRO accounts. I have received interest in these accounts. I have equity dividends and short & long term capital gains in equities as well. Will there be an issue if I file my return as an NRI for FY 2013-14 and convert my accounts to NRO a/c now? How do I inform my NRI status to IT dept, will filing my return as NRI be enough?


  17. Sir
    I have pension income in india. In which saving i can invest to minimise my tax liabilities.Please advise me as i am going to india very soon to open nre accounts and to designate resident accounts to nro.
    Kuljit Kaler

    • Hi Kuljit, How much is the pension amount per month ?

      You can open the NRE account without visiting India. You just need to call the bank & the official will send you the form & will get the form collected via courier.

  18. is there any tax liability arise on NRI If sell his ancestor house property in india and around Rs 50000/- long term capital gain arise and no other source of income in India ,although THIS GAIN IS below exemption limit and NRI want to take over this sell proceed from India to canada what is the procedure required for it

    • As an NRI, you need to pay tax on Long term capital gain even if it is less than exemption limit.

      The sale amount will be credited in your Indian account.

      After than you can transfer funds to foreign account by submitting some forms to the bank.

  19. I have a NRE account. I have been leaving in Europe for past 1.5 years. Recently, I opened NRE FD for a period of 10 years. Now I am scheduled to return to india in next 1 month.

    Can you let me know what will happen to the money in my NRE account and what will happen to my NRE FD. I have only completed 8 months of the FD.

    1. DO I need to close them now before traveling back to india?
    2. DO I have an option to close my NRE FD once I reach India?
    3. What will happen to the interest earned on the FD?
    4. What will be the tax % to be paid in india for the interest?


    • 1. You donot need to close before traveling
      2. Yes, you can do that within 6 months after coming to India
      3. Once your NRE FD is converted into normal FD, it will be treated as normal Interest and you need to show them in you income tax return.

  20. Sir,
    I am a seafarer. According to the rules if i stay for more than 182 days out of India in a financial year i am given nri status. My shipping company pays my salary in usd which is deposited in my nre account in ruppee (according to usd to inr rate on the day of deposit). I am planning to visit Europe on tourist visa where they require income tax returns also, how should i file my ITR if money earned outside India is not taxable. Also if my salary is taxable in India or not since i am working for a Danish company and salary is paid by its Indian office.

    • even if you are out of india for 182 days or more and become NRI, you will still have income in India for period in which you are in India. So you will get Form 16 for time you are in India. You can fiel return for that amount.

      ALso, normally for VISA you need to submit Income proof, which you can submit in Form of Payslips, Bank statements, Form 16, appointment letter & another salary letter from employer.

  21. Dear Mr.Vivek,

    I have read your blogs and appreciate your service. I am an NRI for longtime now and I have been
    using the Resident savings account also for longtime.

    I do have some old FD under this account,however the interest earned is much less than the limit.

    Will there be any issues.

    Also in all my investments and bank accounts , mutual funds etc, my indian address is apprearing
    will there be any issues.

    Would appreciate your reply.



    • Hi, Normally if you are NRI, you should declare it to your bank and also change the status in your investments.
      But many people forget to make these changes because they think they will be coming back to India in near future.

      You should at-least make sure that you file your tax returns declaring all income.
      In case you are planning to stay abroad for long time, you should get the status converted to NRI.

  22. Hi, On 25th July 2014 I left India after getting job opportunity in Australia. I have already left India and right now residing in Australia and will be upto minimum 4 years. Before July 2014 I was resident of India as per FEMA and taxation purpose. I would like to know in the next tax file return( after March 2015 i.e for th years 01 April 2014 to 31st march 2015)what will be my status from taxation rule ? Which option do I need to select while doing tax file return by myself ? Also do I need to change the residence status for all my Indian saving accounts ? Every month I am transfering the saving amount(australian dollars) to my indian saving accounts(which are on my name and my wife’s name). In this case do I need to pay tax for all the money I am sending to my Indian accounts ? Also I am making few FDs in indian accounts, for those FD interest TDS is getting deducted, can I file them for tax refund ?
    Your reply and clarificaion to all my doubts is highly appreciated.

    Thanks Manas Panda

  23. Dear Sir,

    i shifted my self to saudi arabia, and i have an india resident account in HDFC, i opended one NRI account in ICICI bank.

    what ever i am earning here i am giving it to my friends (as they came here for 3 months for tourisim) and they are transferring INR from indian bank account to my HDFC resident account. now my question is do they deduct tax on account deposited in HDFC account directly without informing me? just to avoid reimtance fees we are doing like this.

    provide me some inputs on Tax part.

    thanks in advance


    • If you still have HDFC resident account in India, they can deposit money in it. Any money deposited in that account doesn’t automatically attract TDS.

      Also, how much amount is transferred. If this is big amounts, then there can be an issue.

      • Dear Vivek,

        Thanks for the reply,

        amounts are in bits and pieces, 6 friends came to client place i am giving them local currency for their expenses and taking INR and they are depositing in my account directly. amount will be around Rs. 15,000 /- per head and per month total amount will come to 1 lakh.

        When i tried to access form 26as from saudi, it showing NRI link. does it mean they covert my account in to NRI!

        Thanks in advance.


        • Hi Sandeep,

          Getting that amount once should not raise issues. But If you are getting per month Rs 1 lakh in your account, you may need to explain the source of Income.

          Also, when you try the link for 26AS from outside India, it gives that message,. it doesnot mean that your account is converted to NRI.

  24. Vivek,
    I’m US citizen planning move to India and stay for couple of years for kids studies. I’m planning to invest in NRE FD or FCNR FD. I’m planning to work while I stay in India. Do I have to pay tax in India for the interest from FD. I was tihnking that I only declare that in US and pay US Tax as NRE FD are tax free.


    • Hi Surya,

      NRE FD are tax free but these are open to Non residnets only.
      If you are working in India for whole year, you will be treated as resident in India.
      So you are obliged to notify Bank about your residential status and they will convert the NRE FD to normal FD.

      In that case, any Interest earned should be included in your Indian Income and pay taxes accordingly.
      You should be able to claim taxes paid in India while filing US returns.

      Also note that for US citizens, they may need to show the NRE FD as their Income & pay taxes in US ( even if they are tax free in India)

      • Mr.Vivek, Thanks for the quick response and detailed answer.
        I’m planning to have FCNR deposit in Dollars to avoid exchange fluctuations. will that be converted to INR when I convert the account to resident FD?


        • On your return to India, you can convert the FCNR deposit to RFC deposits ( Resident Foreign currency) deposits. and your money will remain in foreign currency.

  25. Hi,
    I am working in US for last 2 years. In this year my net income in India is very low. But I have a refund claim which is also not more than 1500. I have filled my return online but I don’t think I will be able to submit my signed ITR-V form within deadline. What are the options?

    a) If I do this process when I am back in India which may be after March.
    b) Was it actually necessary to file my return at first place?

    • b) If you want to claim refund, you need to file the return.

      a) When you say in this year refund is Rs 1500, do you mean FY 2013-2014 or FY 2014-2015 ?

  26. Hello Sir,

    I have been staying in Germany on long term deputation since last year Sept, 2013. Now, I am moving back to India in December, 2014. My company used to pay me my Indian salary component directly to my German bank account in Euro as part of my German Salary. Now, once I go back, they will deduct TDS on the Indian salary paid to me since April, 2014. My company has also been paying german taxes as applicable on my behalf.

    Now, my question is, since technically my earning or salary credit in terms of INR was 0 from April to Nov, no money was deposited to my salary account, Why are the deducting the TDS since april on the amount which I have not earned in India. Also, even if they deduct TDS, Can i claim refund during my return file??


    • Hi Rahul,
      You need to get clarity from your HR regarding the split between your Indian Salary and German Salary.
      Also, you need to have sufficient details of how much income was taxed in Germany.

      While filing return, you can calculate the tax on your total income and claim the TDs deducted by your employer as well as taxes paid in Germany.

      You may take help of your Local CA to get the calculation.

  27. Dear Mr Vivek Jain
    I left India by Aug 2014 for a job in Africa. I have opened NRE and NRO accounts and transferring my salary into NRE account. But before starting from India I have transferred money to my own brother Rs 6.5 Lacks from my Bank Account. My brother lives in India. He is paying back about 40 to 50 thousands every month into my NRO account from his bank account. there is no interest charged by me. I need to file tax returns in the coming year as I have to claim reimbursement of TDS detected by my employer between April and July.
    Whether IT Act will consider deposits from my brother as my Income? Should I pay tax for that also. Kindly clarify this.

    Thanks in advance

    • Hiram, As long as you can prove that your brother is repaying the amount which you have given, then there is no need to include that in your Income. In that case it is just repayment of loan. You should have details regarding when you have transferred that amount to your brother.

  28. Dear Sir

    I am an NRI who never made any IT Return . I have investments in Indian equity shares . In FY 2013 and 2014 I have long term capital losses and short term capital gains . Can I set off both ? In case I need to file a retun what is the last date I can do so for FY 2013 AND 2014 .

    In 2014 / 2015 I have short term capital loss , can I carryforward the same for next year

    • 1) You cannot set off long term capital loss against short term capital gain.
      2) For FY 2013-2014, the actual due date for filing return was 31-7-2014. However, you can still file the return but cannot carry forward losses.
      For FY 2014-2015, the due date will be 31-7-2015. If you have short term loss in FY 2014-2015,you can carry forward and setoff against short term capital gain in future years.

  29. Hi Mr Vivek.
    Great work, thanks.
    I am an NRI since 2000 and have been working in various countries since then and presently in Oman.
    I have both NRO and NRE joint account with my wife for easy access for my family.
    I have bought a house in my name in 2005 and other properties and recently I bought a house in my wife’s name to avoid the wealth tax for having morethan 1 house in my name. Is this any way taxable in name as both my bank accounts are joint accounts with my wife. Since I don’t have any source of income in india till date, I never filed IT. Is it advisable to file in near future.

    • Hi Rajendran,

      Just by having joint accounts, does not make it taxable.
      If you donot have any income, then you are not required to file the return. .

      Pls note that if you have taken home loan to buy properties, you can claim the tax benefit on interest paid by filing returns.

      You mentioned you have other properties, but does that not giving any income ?

  30. Hi Vivek Jain,
    Thanks for your article. very useful. I came to Saudi Arabia on 29th September 14 for employment. so i will be in Saudi for 183 days which is more than 182 days of stay in India. my query is
    1. I joined in saudi arabia office on 29th sep. My date of travel to saudi also same day. whether 29th sep will be considered as stay in India or stay in saudi?
    2. If considered as stay in India whether i will be considered as NRI? because staying in saudi for 183 days more than 182 days of stay in India
    3. What is the proof to be submitted to income tax department to show as an NRI?

    Thanks in advance

    • 1) if your departure date from india is 29th Sep, then that day will be counted as resident in India. So For FY 2014-2015, you will be treated as resident in India.
      2) You will be considered as Resident in India as you were in India for 182 days or more.
      3) Your passport stamps is normally used to calculate number of days. You are not required to submit any proof while filing returns.

  31. Hi Vivek,

    I am working abroad on business visa and once in 3 months (depending on visa) I travel back to India and get new visa. I stay outside India for more than 182 days in financial year.

    My salary is directly credited to my NRE account in India. I am only paid onshore salary (there is no India’s salary as I work for a foreign company).

    Do I need to pay the tax and if so, how?

    Thanks & regards,

    • 1) Who is your employer and what is your principal place of employment.

      As the Business visa is for business meeting and not for employment, you need to consider the following clause to determine whether your ar resident or not:

      A person is Resident in India
      1) if he is in India for more than 182 days during the fiscal, beginning 1 April and ending 31 March.
      2) If he is in India for 60 days or more during the year and 365 days or more during the earlier 4 fiscals. If you fulfil both these conditions, you are regarded as a tax resident of India, though you have been in India for less than 182 days

      You need to check the 2nd clause to determine your residency.

      If your status is Resident, then your Global Income is taxable in India. You can claim the tax paid overseas while filing return in India so that you donot pay double tax.

      Which other country do you pay tax in ?

  32. Dear Mr Vivek,
    Your blog, articles and responses are very informative and very helpful, its very difficult to get this information anywhere, thank you very much. I read all of your articles and most of my doubts are cleared.
    I am an NRI since 8 yrs, I have NRE and NRO accounts for the past 5 years (I converted resident account to NRO account after 3 yrs of becoming NRE as I was not aware of rules). Now for the past 5 years TDS is deducted from my NRO account, its very minimal (not taxable). But I never filed IT returns to claim refund as it is very less.
    Now I like to file IT returns online (for future), for that I have to register online and they are asking for an Indian mobile number (+91) without which I cannot proceed with registration. I dont have an Indian mobile number, what should I do? Is there any way to change it to overseas number? can I give my relatives number? Is there any way that NRIs can register for IT returns with overseas number?

    • Hi Narendra, You are right, for online efiling registration, Indian mole number is compulsory for activation.
      You can give your relative’s number.

  33. Sir,
    Currently , I m working in Saudi Arabia since 2 years, and frequently transferring my salary amount into my brother Indian Saving account! Is he / am i eligible under criteria of tax filing act.

    your rapid action is highly appreciated.


    • Hi Jasim,

      1) if you are just transferring money to your brother account , & you DONOT have any Income is India, then you donot need to file return in India

      2) As your brother get amount from you, if the amount is large, then IT officer may ask for details. As these amount are not treated as Income for him. But any interest earned on these amount, will be taxable for your brother.

    • You can invest in MF / Shares through your NRO account. the taxability will depend on your type of Investment & holding period.

  34. I have received a letter from Income Tax dept that i have not filed Tax returns from 2010 to 2013, but, i have only income from interest, which i TDS taken by banks, but, i do not have amounts of TDS, how would file Taxes?

  35. Hi Vivek,

    I am NRI since I started working and around `10 years back I bought a house from Housing Board on EMI basis. Now I sold this house and invested capital gain amount in buying a new house.
    Do I need to file tax return.


    • Yes, you need to calculate the capital gain tax and file the return. Otherwise you may get notice for non filing of return & transacting in a property.

  36. I am NRI and have some FD’s that generated interest income. I contacted a CA in India who says i can file taxes in India for last two years and claim refund of some of the default TDS applied. He wants IRS tax filing confirmation number for last year. Can you tell me if this is same as US Social Security number or is it different. I am hesitant to give my SSN number and currently do not have access to tax documents on vacation.

    Thanks in advance,

  37. I am a retired 76 years old women from Central Government. I am receiving around 1,60,000/- as my pension and for my husband (he is no more)1,70,000/- as family pension and I am receiving around Rs. 15000/- as Interest on FD in the Financial year 2013-14. I spent More than 6 months with my son in UK. What are the consequences as per Income Tax Act in India. Shall I file the return? Shall I pay the Tax? Is there any exemption from tax as an NRI? Please clarify.

  38. Hello sir,
    Currently , I m working in Saudi Arabia since 4 years, and frequently transferring my salary amount into my Indian Saving account! Is am i eligible under criteria of tax filing act.

    your rapid action is highly appreciated.


    • Hi, Is your question – whether you need to file return in India ??

      If you have no income in India or below threshold taxable limit, then you need not require to file tax return in India.

  39. Hi Vivek,

    Thank you for your posts. I am on NRI status and I recently came to know that we should convert our residential accounts to NRE/NRO.
    I do not see the bank customer service really helpful to explain many of the questions.
    1) I opened an new NRE/NRO account, can I keep one of my residential account without much money on it as I do not want to loose the benefits of that account.
    2) I am not sure if I will go back in a year or will stay long. As you have mentioned NRE FD’s will not earn interest if broken in a year. Can these FD’s be converted to residential FD’s on my return without loosing interest if I return before 365 days?
    3) In my case is NRO FD a better option?


    • 1) Normally you should convert your resident account to NRO account, but many people do not actually do it.
      As bank has no means to find out, they also donot take any action. If the balance is low, the chances of having any problem is very remote.

      2) minimum term of NRE FD is 1 year. If you break before 1 year you will loose interest.
      If you go back to India, you need to tell the bank within 6 months. So essentially you can keep NRE FD for next 6 momths. Again, it is your responsibility to tell the bank.
      3) I think you can keep it as NRE FD if you are going to be overseas atleat 6 months,

  40. Hi,

    I am in KSA with family as NRI since 2009-10. I have given my house on rent just 6 months before. The house is on joint name with wife having my name as first. Its rent is being deposited in joint saving account having my wife name as first. The total rented income is less than 1 Lac. I am transferring NRI income in NRE account and having NRE FD over there.
    1) Do I need to file IT return even though income is very below the threshold limit ?
    2) If it is who has to file, me or by My wife ?
    3) If I have to file return, do I need to show NRI income ?

    Thanks and Regards,

    • 1. You donot need to file the return in India if your income is below taxable limit.
      2. For the rent income, either you or your wife or both can show the income ( as property is in joint name)
      3. You donot need to show the foreign income (if you are non-resident)

      • Thanks for quick answer.
        Further clarification to item #2 , As I do not need to file IT Return per your answer #1 , Is it mandatory to file return considering your response to Item #2.

        Thanks and best regards,

  41. Hi VIvek ,

    THanks for your highly informative blog.Have got a query.Have left India on 5 the JUly 2014.Came back to India on 25 the October 2014.left India again on 18 the January.will not be coming back before April I a NRI

  42. Dear Vivek,

    Thanks for your reply.I am again slightly confused. I have travelled outside India to work in a foreign shipping company.please guide

    • Everytime you going out of India, are you getting an overseas employment contract ? so is there an employer – employee relationship between you & overseas company. So you quitting job in India and then joining company overseas ?

  43. Dear Vivek ,

    I am not working in India.every time when we go out for working in ship,we get a new employment contract from an overseas company.

      • Dear vivek,
        Working on foreign ship.exit out of India 5th July.then came to India on 25th October.then again exited India on 18 the jan 2015.kindly advice.

        • w.e.f. 1st April, 1999, a crew member will be treated as non-resident in India if he is on board such ship outside the territorial water of India for 182 days or more during any year.

          Both the days of travel (of leaving India and coming into India) have to be counted as days spent in India.

          From that calculatio, you were out of India for 183 days which makes you non-resident.

  44. Dear Vivek,
    I am awaiting your valuable reply for my e-mail sent to you on 22 Jan 2015 regarding filing of Income tax return by NRI.
    I am unable to determine my taxable income. I have Shop Rental income of One Lac per year plus notional income of second self used house. I am unable to calculate notional income as Municipal Rateable Value is not published by Mumbai Municpality. They have discontinued the system of levying Municipal Tax on the basis of Rateable Value. Now they are leving Municipal Tax on the basis of Capital Value published by them.
    Secondly I have Long Term Capital Gains from Equity oriented Mutual Funds, Dividend from Shares and Mutual Funds,PPF and Bank Interest. Total amount is as under: 1. F.Y.2012-13 NRE A/c – INR 5 Lacs (Exempt) and NRO Account INR 1 Lac twenty Thousand (Dividend and PPF exempt income included INR Twenty Thousands) . 2. F.Y. 2013-14 NRE A/c Twenty Three Lacs (Exempt-LTCG on Equity MF 22 Lacs+Bank Int and Dividend 1 Lac). NRO A/c One Lac Thirty Thouands (Including Exempt Dividend and PPF Interest Twenty Five Thousands).
    Appreciate your reply as soon as possible.

    • Hi Jagdish,

      Dividend is tax free in the hands of investor.
      PPF income is also exempt
      LTCG Capital gain on Shares & Equity funds is also tax free.
      NRE interest is tax free

      So I think the only income taxable for you is Shop rent & deemed house income. If the deemed rental income is not able to calculate, you can choose the amount as best estimate based on current rented properties in that area.

  45. Dear Vivek,

    I am an NRI since 2011. The last IT I filed was when being a resident and done by an external agent through e-filing at IT website. I have an NRE account in India. But didn’t open an NRO account. I have maintained the SB account for auto deductions for insurance premiums and credit of share dividends. The problem is that I am an active share trader (although making very meagre profits or mostly losses) and didn’t know that NRI’s are allowed to trade in stock market. This year I got email notification reminder from IT dept asking to file my returns for only AY-2014-15 to remain compliant. I checked the tax calculation statement generated from my stock broker it shows negative long term capital gains. but short term gain and (speculative gain as business income). What is the best course of action as speculative gains cannot be shown. at the end there is a tax payable of rs 10000 odd assessed by the broker.
    What is the best course of action.

    1) Is it okay if I file the return without declaring my nri- status to also account for business income and pay the tax appl.
    2) I only declare long and short term gains from that statement and declare as an NRI and pay tax appl.

    Apart from this if I add up all together the total income dividends (inr 30000) and bank interests (less than 7000).
    I need some guidance regarding this. I will face the same situation for this year too and then on I will sort out the matter.

    • Hi It is better to show your correct Status – Non Resident while filing the returns.
      Also, to show the correct profits / losses under “Capital Gain” as well as Business Income.

      Dividends are tax free anyways. Also if the Bank Interest is on Savings bank, you can claim deduction u/s 80TTA upto Rs 10000.

  46. Hi Vivek,
    I’m an NRI residing in US and I have NRO and NRE accounts. I wish to open USD FCNR FD account. Instead of opening one FCNR FD with big amount of money, can I open multiple FCNR FD accounts with smaller deposits? Or is it that a person can have only one FCNR FD account for a given NRE account?
    Like instead of one FCNR with $50,000 can one open 5 FCNR deposits with $10,000 each with different term periods?
    Appreciate your response.


  47. Dear Mr. Vivek,

    I am an NRI from 2011 and have not filed returns from then on. I received email reminder from IT department asking me to file returns for AY 2014-15. I am an active share trader in stock market and I came to know off late that NRI’s are not allowed to speculate and need special DP accounts. Also I have not started an NRO account and have only an NRE and SB account.
    Can you please guide me how should I declare my returns ? The statement from my broker shows business income and negative long term gains and small short term gains. As an NRI I am not supposed to have speculative income. I don’t have any other source for income apart from this and overall income is less than 120000 from interests and dividends.
    What is the best course of action in your opinion.

    • Hi Tony,

      As an NRI you can trade in Derivatives but through separate account.
      Now you are already traded through normal account, nothing much can be done.

      Regarding showing the income, you can always show the long term 7 short term capital gain /loss under Capital gain head.

      But for derivative income, it will be classified as Speculative business. I don’t think that there is any restriction to show income under that head for NRI.

  48. Hello Vivek,

    First of all many thanks to all your time in posting to help many people! I myself came to the US in 2009 to do my Masters and living in the US for around 5.5 years ever since. I am working here on H1-B Visa. I am planning to open a NRE account in India. My question is, when I plan to return to India permanently in 2-3 years, would I need to file tax on my NRE account in India? How will that be handled? Please advise.


    • Once you go back to India, you can close your NRE Account and transfer funds to an Indian resident account. or you can change your NRE Account to resident Indian account.

      Any previous money lying in NRE Account will not be taxed.

      Once you convert your NRE To Resident account, any interest earned will be taxable. Interest on NRE account is tax free.

  49. Hi Vivek, I have received a notice from compliance management cell. The information code is CIB-502- Contract of Rs. 10,000,000 or More in the commodities exchange. What does this mean? Could you please help. I didn’t exchange any commodity & earn income. Thanks for your help.

  50. Hi Vivek,

    I have received a notice from compliance management cell. The information code is ‘CIB-502’ – Contract of Rs. 10,00,000 or more in commodities exchange. What does this mean? I didn’t do any commodity exchange. However, I did sell shares. Could you please clarify. Thank you

  51. Dear Vivek,
    I am Australian citizen having resident and NRO accounts in Indian Banks. I want to sell my property in India. Kindly advise tax implication. Can I get some benefit under DTAA as India & Australia have DTAA agreement?

    • Hi Shankar,
      Once you sell the property, you need to calculate the capital gains after taking indexed cost of acquisition. See link below:

      You can save capital gain tax by investing the amount in certain options. See below

      If in Australia, you need to pay tax on global income and if you need to add the capital gain related to india, then you can claim the tax paid in India while filing returns in Australia.

  52. Dear ,Vivek

    I am a NRI past 23 years and, I have invested my NRE Funds to some property
    1.5 acre MT plot and 3 old house under my name in Kerala .The 3 house I rented already and getting Each home 5000 Rs per month .The rental amount directly Deposit to my NRO acc. My question is
    Whether I need to file IT returns or not?
    Pls revert to me ?

  53. Dear Vivek,
    I am an NRI since 2000. I own a flat and a plot of land in India and my wife owns a flat. We wish to trannsfer one flat to our daughter, who is 19 years old. But she is planning to go to US this year to pursue university education. Considering the US tax laws, is it advisable to transfer the flat to our daughter ? Kindly advise and oblige.

    • Unfortunately I am not expert in US tax laws. But if you gift the flat to your daughter, there will be no capital gain in India (as per section 47 of the Income-tax Act, gift of a capital asset does not constitute a transfer and is hence not subject to capital gain tax)

  54. Hi Vivek,

    I am an NRI, working in UK for the last three years and I am living abroad for the last 4 years and a half. My organisation has send me for an assignment in India which will mean living in India for more than 182 days, I will need to get back to UK for good after this assignment. Also, i don’t derive any income in India, i still get paid only in UK and pay my taxes there. My expenses in terms of travel and hotel are reimbursed at actuals. Do i qualify to be an Indian resident in the given situation for this financial year? If yes, then do i need to file an Income tax return for this financial year? How can i avoid paying taxes twice?

    Thanks for your help in advance.


    • Hi Preeti,

      If you are in India for more than 182 days =, then you will be treated as “Resident” in terms of Income tax act.

      You need to file returns in India. However, you can claim the tax amount paid in UK so you will not be taxed twice.

  55. I’m an NRI past 7 years and I have a monthly income of around 30,000 to 35,000 INR, which comes from my flat which is currently on rent in Delhi. I wanted to know whether need to pay tax and file Income Tax Return and if yes, what will be the legal procedure ?

  56. Dear Vivek,
    What an excellent and informative blog, appreciate your efforts for providing valuable information for US(NRIs)
    Well, I have query here, I have been working abroad since last 22 years and I have an NRE account.
    I have never known about the IT Returns till last year onwards I started to hear alot about it.
    I donot have a PAN card too, Becasue, I was in a notion that Being NRI Iam exempted from Taxes and I was a bit Cofused about the PAN card.
    Well I donot have any investment in India except a Flat I bought that too on lBank Loan.
    Hence, My query is,
    1. What details Should I furnish in order to apply for a PAN card.

    2. My flat is registered in may name and my Wife’s name as well(she has a PAN card and she is housewife), so last Week she recieved a call from IT dept. that, tax has to be paid for the purchase of Flat. she didnot tell him that it is on Bank loan. so what type of Tax is levied on the purchase of New flat which is solely for self residence under Laon?

    3. Regarding the PAN card I am a bit confused whether, its is required to furnish bank details and complete account details? What will be the consequences? though I donot have any FDs and any other investment because I am the lone earner for my family and all gets spent on household and children education plus loan payment.

    appreciate for your kind advise in this regards,

    Syed AH

  57. Dear Mr.Vivek
    I was NRI since 2000 and came back in August 2014; decided to be resident to take care of parents. All these year my indian income is NRE FD interest only; as they are not taxable I have not filed any IT return since 2000.

    I have purchased house in india, in 2013 by taking housing loan and spent some amount for remodelling the house and which was completed in Dec’2014. I am paying EMI till now through my NRE account and informed the bank to convert my NRE account to resident a/c. Having decided to stay back , I have repaid most of the loan now. I don’t have any rental income from the house so far. Possibly I will let out in near future.

    As I stay more then 182 days I am resident by IT act and will have to pay tax for the year 2014-15 for the interest earned through NRE account and I don’t have any other income . Shall I have to consider interest accrued amount for the total income as there are some FDs which mature next 1 or 2 years. In this respect can you please advise me what are the tax benefit I can avail and how much ? taking into account interest and principle paid . The interest and principal repaid is more then limit for the tax purpose.

    Thanks & Regards

    • Dear Mr. Vivek

      Can you please reply my above query , sent on 01/03/2014, to enable me to finalizes my IT returns papers and submit ?

      Thanks & Regards

    • Hi, As you came back in Au 2014, you will be resident in India for FY 2014-2015 ( for which you need to file return by 31-7-2015)

      Any interest earned on Bank account after it is changed from NRE to Resident account, should be treated as Income.
      You can claim the Home loan Interest paid u/s 24 as well principal u/s 80C

      How much is the income from FD in this year? and how much did you pay in home loan principal and interest ?

  58. Hello Vivek,
    I bought a resale property from an NRI last year however I didnt withhold 20% TDS from the sale price as neither was I aware of the rule nor lawyer or sub-registrar advised it. I only withheld 1% TDS as required by resident as sale price was more than 50 lac. Will I be in any trouble now. Legally have I violated any laws. Also, I know now that seller did actually have capital loss on the transaction and will be filing his IT return (to probably recover 1% TDS). Please advise.

    • Hi Mandar, As the transaction is completed, you cannot do anything else now.
      IT dept are not very strict in case of TDS deduction by Individuals. So you should not worry much.

  59. Hi Vivek,

    After my education i left to overseas and leaving for past 10 years in overseas and so far i haven’t filled the income tax return in india. Transferred funds i kept some as nre deposits and some in saving account resident deposit around 30lac. Bank is automatically deduction TDS on my resident deposit. And last year i have constructed the building through nre funds, and for couple of months it was vacant and started letting from this jan 2015 onwards i received the rent of 1 lac so far. Also 4 months ago, i have become 10% partner in new family business firm (As it’s new start, there is no profit).

    I am still in overseas and recently i have become oci. Kindly advise how to fill the income tax this year in my scenario? i guess i have to show only present FD’s in resident account and recieved income from rent and expenses on building and also firm partner declartion. Please advise anything more to declare, i guess past history no need to declare. let me know which ITR form i need to fill?

    Appreciate your reply.


  60. Dear Vivek,

    I am an NRI and holding an NRO account in India. I have a flat which is on rent and the rental receipts are deposited in this NRO account. I am staying in a Gulf and as per DTAA agreement the TDS is being deducted at 10%.

    Can I claim refund for the tax deducted. If yes, how ?

  61. Hi,

    I am an NRI and had annual rental income of Rs. 384000 during FY 2014-15 from my apartment in India. If we apply 30% standard deduction, the net rental income is Rs. 268800. I also paid total housing loan interest of Rs. 307000 and contributed around Rs. 18000 to LIC.

    Do I need to file income tax return in this case? Is the deadline 31st July 2015?


    • Hi Mahesh,

      If your total income (without chapter VI deductions – 80C) is above taxable limit, then you need to file return.

      As you will have Loss from House property, it is better to file return and carry forward the loss.

  62. Dear Mr Vivek,

    Excellent support to NRI diaspora queries and hats off to your consistent replies.

    I have a typical question which did not find in your previous replies to others. I am NRI having rental income from one flat in India 1lakh with combined income 2.2lakhs. We both are having separate PAN card and filed return separately prior to becoming NRI. Can u please advise if I need to file IT return for the year 2014-15. My other NRI FD interests are already tax free.

    • Hi, Whether the property is joint property ?
      If your total income is below Rs 2.50 lakhs, then you donot need to file return.
      However, if any TDS is deducted,you should file return & claim refund.

  63. Dear Mr.Vivek,
    You are sorting out many queries from different individual about NRI (Tax) Clarification.

    Am also having some issues when we are talking about Tax. I do believe, you can also sort out my issues.

    My question is that, I’m holding the NRI Account in India which I cannot using it properly.

    Though I’m working in abroad, I will transfer money from local exchange to my saving account in India every month but not in the NRI account.

    Recently I received SMS from Govt Portal that it’s mentioned if you are not file your tax returns with in a duration, Please make sure to do it on time. For which I understand that I’m also a Tax payer to pay the Tax.

    Can you please guide me what way to avoid the tax or Am I eligible to pay the Tax?

    I’m very much familiar, if I am working in India, I must pay the Tax according to the Govt norms and regulation.
    And also advise me, what way to use effectively my NRI account in India?

    • Normally you will get notice, if your have done large transaction or TDS is deducted but you have not filed the returns.

      It seems that after you transfer money to your Saving account, have you created FD with that amount on which TDS is deducted ?

      In the Income tax compliance notice, normally they give the details of transaction and code as well. Can you please share that.

      Note that NRE Account Interest is tax free.So you can transfer from foreign account to NRE Account.

  64. Dear Mr Vivek,

    Thanks for your posts. Below is my case:

    In FY 14-15, I worked in India till 4th Aug, 2014. Then I took a break of 3 months (no income). Then I joined a company in Singapore (not an onshore) on 27th Nov, 2014. I am getting my salary credited here in Singapore bank account with tax deducted at the source. My questions are:
    1) I got salary for around 120 days in India, but I stayed there for more than 183 days. What will be my status? Resident or Non-resident?
    2) Am I supposed to pay taxes on income earned in Singapore? I already am paying my taxes here. Can I declare the same and avoid double taxation?
    3) If I have to pay taxes on my foreign income, will I be able to get tax benefits on my investments in India under 80C?


    • hi Chandra,

      After you join the company in Singapore, are you based in Singapore now? When did you leave India?

      1) If you were in India for 183 days, then you will be treated as Resident In India.

      2) India has DTAA agreement with Singapore, so you will not be taxed twice. You need to declare the Income while filing the returns in India, calculate the tax and then deduction of taxes paid in Singapore.
      3) Yes you can claim deductions u/s 80C

      • Thanks for the reply Vivek.

        Yes, I am based in Singapore now. I left India on 26th Nov, 2014 and I will be staying in Singapore for long.

        In ref to point 2, do I need to declare both India income and Singapore income at the same place by adding them up or separately? And under which section this deduction on taxes paid in Singapore will come?

        One more thing, I haven’t opened any NRE or NRO accounts in India but have accounts in 4 banks there. Can I transfer one of them to NRE and one to NRO? Do I need to notify my banks about my current stay now? I have notified only one of the bank.

        Anything other I need to take care of while I have left India for a longer period of time?

        • Hi,
          You need to submit return in ITR 2 and there is separate section for Foreign Income :
          Schedule FSI
          Schedule TR
          Schedule FA

          2. yes you can submit request to the bank informing your residential status and ask to convert them into NRE/ NRO account.

  65. I appreciate you helping out all with your expertise by spending your valuable time on this forum.

    Is my understanding correct that NRI having income from only 2 sources (e.g. NRE FD interest and NRE STCG) is required to use ITR-2 in order to claim the TDS? Do I need to show NRE FD interest on tax return as it is already exempt from tax?

    Thanks for your help.

  66. Dear Vivek,

    I have one question :-

    1. I am an NRI , I have purchased one flat in april 2011 which is still underconstruction , no loan on this flat (all payment thru NRI saving account), the possession of this flat i will get in next year december 2016. cost Rs 40 lakhs (still I need to pay Rs 5lakhs as internal work demand will come in future)., Now I want to sell this flat in this month, (suppose 50 lakhs).

    2. I want to purchase new ready flat now for Rs 2 cr, here I want to know whether I will be liable for TAX on my first flat, as i will get 50lakhs? also can I invest that amount in purchasing new flat.??

    Please let me know how do I need to do transaction to save tax.

    Thanks in advance for your co-operation.

    Best Regards

    • Hi Rahul,

      When you sell your under construction flat after 3 years, then it will be long term capital gain tax.

      you need to save entire sale proceeds into the new property to save the capital gain. Make sure that you buy the property before you file the tax return. if you cannot buy the property before filing tax return, you need to open a Capital Gains account scheme at the bank and deposit the money.

  67. Hi Vivek

    I am a NRI for taxation purpose based on number of days that I am residing abroad for my employement. I need to file ITR for FY 2013-14. I have income only from FD, NRE/NRO interest and one of matured LIC single premium policy(Jeevan Astha). Please help me in following queries :-
    1. Which ITR form should I fill ? ITR-1 or ITR-2 ?
    2. Is ITR form selection purely based on source of income ? Is it also based on my residential status as NRI ? Is there something such as that NRO needs to mandatory fill ITR-2 ?
    3. I had a maturity sum of INR 36212 on investment of INR 25000 for Jeevan Astha. In which section, Do I need to show maturity sum as income ? Also, what should be amount of income INR 36212 or INR (36212-25000)?

    Thanks for your help.

  68. Hi Vivek
    Your details above are very good but probably i have a different case and query.
    I was an NRI during FY 2013-14 spending around 210 days out of india employed in Oil industry in mid east and returned back in April 2015. My salary got credited directly to my SB ac every month. The last two salaries for march 2014(paid till march 21) and April 2014 (paid till april 10) got credited in april and may 2014 respetively. This year i am a resident working in india. Will the salary credited in my ac during this financial year be considered as part of fy 2015-16 or it can be counted on number of days for which it was paid rather than when it was received by me. while filing return in the ITR-1 utility for fy 2013-14 do i need to mention my global income credited to my SB ac in indian bank.

    • Hi Praveen,

      Could you please let me know who was your employer during our foreign visit. Whether it was Indian Company or UK company ? Did you resign at UK company, when you left for abroad? Did you have separate employment contract with the Middle east company.

      • It was a us company’s subsidiary in middle east paying on a day rate basis and totally fresh contract for new employment of one year. It was an on-off rotation cycle job (90 days work and 30 days leave at home no pay for leave period). i left for abroad in the month of april 2013 and returned back in april 2014 however i kept visiting back during my leave but completed 220 days out of india in the fy.

        • also i had a receipt of below 50000 for consultancy in april 2013 for which service tax and tds were paid. which form shall i use to file return

        • Hi Praveen, if you are out of India for more than 182 days, you will be treated as Non residnet and only the Income generated in India should be shown in Income tax forms.

  69. Hi Vivek,
    I am an Nri having british nationality and staying in India since last 2 yrs. do i have to file returns. Also i had a property which was bought in 2002 for 2 lakh and now it is sold for 21 lakh. It was a property bought by my late father. do i have to pay capital gains on 19lakhs and how much will be the percent. Also can i invest that money in any type of bonds or fd to avoid tax.
    Thanks in advance for your help.

  70. Dear Sir,

    I am an NRI since 2009. I filed ITR till AY2011-12 as I had indian income. But I could not file ITR for AY2012-13 although I am eligible to get a refund of Rs. 20000 after adjusting the TDS Form 16A and LIC payments under Section 80C towards the indian income accrued from NRO FDs. Kindly advise me how to file the ITR for AY2012-13 and avail the refund. I am still an NRI and shall visit India only in July15.


    Sujit Saha

  71. Hi Vivek – I’m staying in UK from 2011. I’ve transfered money at regular interval to my indian resident account and have some FDs. I get interest on those FDs. After talking to you in a different thread, I’ve filed income tax return. Now I’m planning to open a NRO and NRE account for future. I need your help here.

    1. Do I need to close the resident account /FDs which I already have or transfer then to NRO account?
    2. I’ve heard that tax on NRO account and NRO FDs are at 30%. Is there a something which you can advice to reduce the tax burden to the normal level.
    3. Can I transfer money from my NRE account to UK bank account without any problem in future?
    4. Can I transfer money from NRE account to indian resident account when required?

    I really appreciate your help in responding to queries in detail.

    Thanks a Lot

    • 1) You can request for transfer of Resident account to NRO Account. Alternatively, you can close it and open new NRO Account
      2) TDS on Interest on NRO FD is 30%. But, for some of countries DTAA is applicable and TDS @15% is deducted provided tax residency certificate is provided to the bank. Check with your bank.
      3) You can transfer money from NRE Account to UK Bank Account without any limit. You need to give the funds transfer form to the bank.
      4) You can transfer money from NRE Account to residnet Bank Account.

  72. Hi Vivek,

    Can you please provide a solution for the following situation.
    A person is been non-resident from 2000-2006. While he was non-resident, he opened an NRE A/c.
    He came to India in 2007 and was making visits to foreign country on and off during 2007-2010.
    However, his residential status for A.Y 2011-12 is resident.
    During the period he was non-resident, he made investments in India by way of Mutual funds.
    These funds are redeemed in A.Y 2011-12. But the amounts were credited into NRE A/c as it was not closed by the person at that time.
    TDS was also made on the proceeds from redemption of Mutual Funds U/s 195.

    Now, does the amount received by way of proceeds from Mutual funds are taxable in the hands of that person for A.Y 2011-12.
    Amount received is Rs.752000/-.

    • Hi Pallavi, Which category of mutual funds – Equity / Debt etc? and on how much TDS is deducted ?

      As no TDS is applicable for long temr capital gain on Equity funds ?

  73. Hi vivek,

    I am working abroad for more than 3 years. I used to file my IT returns as long as I was working in IT companies in India. Currently I do not own a property nor do I have any investment. The money I sent to my dad’s account for home expenses and for my sis marraige. Am I supposed to file my returns? When I come back to India and start my job as a resident, How would I continue to file returns(I mean what document I need to use as reference)? I need to have up to date synch with IT department about my status. What do I do?

    Please advice.

    • Hi Mirza, If you donot have any taxable income in India, you are not required to file the return.

      Once you come back to India and earn in India, you can file the return as normal showing that year income.

  74. I am working in Maldives. With one of my friend we are planning to register a partnership firm in India. The sales is in Maldives. one item importing from other country directly shipping to Maldives. But the payment is made from the
    entity in India. The sales proceeds will be deposited to firm’s Bank account in India.

    Now the doubt is whether the income generated in Maldives and deposited in India is taxable?

    • Any profit made by Indian activity, Purchasing in India and then sending to Maldives (at different price), will be taxable in India.

  75. Hi Vivek,
    Appreciate you a lot for clearing the doubts of NRIs on IT Return issues.

    I am an NRI since 8 years and have NRO & NRE accounts and have FD on both the accounts. Which ITR form I should fill.
    Bank is deducting TDS on NRO FD accounts and issuing Form 16A, for that I am filing ITR return. What about interest earned on NRE FD? Is it also be shown as income exempted in IT Return? Kindly advise.

  76. My son is working in USA and he transfers money to INDIA into his NRE FIXED DEPOSIT a/c.The interest earned in FD a/c is not taxable in India . So interest earned is taxable in USA?. If so then what are the ways of investment in India to avoid tax in INDIA as well as USA

    • 1) For person resident in US, the interest earned globally will be taxable in US also. However, if the country has DTAA agreement, any tax paid in other country can be claimed in US.

      However, in case of NRE FD , there is no tax to be paid in India ( as this is tax free), it needs to be declared in US and taxes need to be paid in US.

      2) Even if you invest in tax free instrument in India, any tax free income in India will still be taxed in US.

  77. Dear Vivek,

    I am an NRI since 2005. I had purchased a site in 2012 and paid the amount from NRE A/c and other Savings Banks A/c as well. Now I am planning to sell the same for a bit higher value. And I need to invest all the money received from the sale as FD. Could you please recommend me the best way to invest this proceeds of sale in Fixed Deposits ( NRE or NRO) to avoid any sort of Tax.

    Thanks & Best Regards,

    • Hi Sudhir,

      For sale of plot,if you sell before 3 years, it will be treated as Short term capital gain and will be taxed accordingly. If you sell after 3 years, it will be long term capital gain and you can invest the amount in selected instruments to claim tax benefit.

      Please let me know the date of purchase, purchase amount, type of property.

      2) Re Sale of FD, what do you mean? Do you have Fixed deposit which is maturing? Where do you have this FD? in Resident acount / NRE / NRO ?

      • Dear Vijay,

        Thanks for the reply.
        It is a plot ( agricultural land) for 8 Lac. and was purchased in Nov’2012.

        Actually I mentioned that If I sell this plot and can the amount from this sale be invested into NRE or NRO FD. ( As I have NRE and NRO bank A/c as well).

        Thanks & Regards,

        • In case of agricultural land, there is no capital gain from sale of such land.
          The amount can be credited in your NRO account. Fro there you can always transfer funds from NRO to NRE after filing certain bank forms.

  78. Sir
    I worked 10 years abroad and resigned my job in 2014 june31 and comeback to india.Ireceived my graduaity and bonous as my final settlement (10 lacs)and 3 month salary (3×3 lacks=9lacs)which comes arond 20 lacs and my Nre deposits interest around 10lacs.My total income there any concessions will be given or total amount will betreated as indian income since I have worked only three month outside india for the financial year

    • 1) Which country were you working? Did you taxes there on this income?
      2) Did you acquire citizenshp of foreign country >
      3) NRE deposits are not “Income”. It is your capital amount.
      4) You may be treated as “Resident but not ordinarily resident (RNOR)” in a given financial year – if in any previous year if he has been a non-resident in India 9 out of the 10 preceding previous years or he has during the 7 preceding previous years been in India for a period of, or periods amounting in all to, 729 days or less.
      You can be an RNOR for 3 years.
      For Indian income tax purposes, an RNOR is treated at par with NRIs. That means, an RNOR needs to pay tax in India only on his Indian income. Any income from abroad will not be taxed in India.

  79. Hi Mr. Vivek Jain,
    My query is, do I as an NRI need to file tax returns of income from sale of listed company shares on NSE. Tax on the short term capital gains I had (very, very small amount) is already taken by my bank as TDS. So if I do not wish about to claim this very small TDS back, can I forget about filing tax returns.
    Thanking you,

  80. Dear Mr. Vivek,

    I married a US citizen and got a green card 5 years ago and moved out of India. I did not change my bank accounts in India to NRE/NRO as I wasn’t aware of the procedures before moving. I earn rental income in India and that is below the taxable range. My dad has been filing taxes for me using my previous pan card which I acquired before becoming an nri and showing me as an Indian resident. I plan on changing my accounts to NRO and inform the IT department of my nri status soon. Will the bank and IT dept question on why I didn’t inform my changed status for so long? After I convert my accounts to NRO and start filing taxes as NRI, will my rental income in India be taxed in India or will it be taxed in the United States considering it as overseas earned income? I acquired the property on which I earn rental income before I became a non resident. Please help me with the info. Appreciate for your time.


    • Hi Kirthi,

      1) You should change your current bank account to NRO status. Normally Bank will not question even if you are doing after long time.

      2) Your income from Rent is taxable in India, but as you mentioned it is below taxable limit, you will not have to pay any tax.
      However, you need to show this income in your US tax returns as well and pay taxes there. (you can claim any taxes paid in India as per DTAA agreement between US & India)

  81. I am an nri and sold my mutual funds thereby having long term capital gain of Rs 10 lakhs. I do not have any other taxable income in India. Do I need to file IT return.
    Thanks & Regards

    • Hi Rajiv, Long term capital gain on Equity funds in NIL.

      LTCG for Non – Equity schemes – 10% without indexation & 20% with Indexation ( LTCG only apply with minimum 3 year holding period for non-equity schemes)

      So if you have LTCG with non equity schemes, you need to file return and pay tax.

  82. Dear vivek,

    Highly appreciate your blog.but i am having a is mentioned in ur blog that arrival/departure dates to be considered as resident.but could u please clarify this again taking into consideration the judgement of it at,Mumbai in 2012 between fausta c.cordeira vs income tax department,as per my understanding
    Of this judgement,first day in a series of days to be excluded.hence arrival date to be excluded.please clarify as I am a border line case in last Fy.
    Thank you

  83. Dear Mr. Vivek,

    The logs of your blog is very useful and quite informative. I have a question when I was resident , I opened the HUF account and had some income and investments in that account . Now I am working abroad and a OCI card holder. So can I still continue with the HUF account or do I need to dissolve it . In case if I continue can OCI karta can give gift or loan to his HUF account ?

    Can existing HUF with NRI/OCI karta can open NRE account or has it to be NRO account ?

    Also, I have some FCNR FD accounts . Till now I did not enter these details in Balance sheet as I thought that the Interest earned on FCNR FDs is tax free. But I presume although the interest is tax free I should still show these investments and balance of my FCNR A/C details in my balance sheet in a same way I show for my NRE FDs. What are your views? Should I show the FCNR, FDs and balance of FCNR A/C details in my Balance sheet? If yes, in which column of the Income Tax return because I could not locate it to enter in Foreign currency? Also, does the exchange rate applied for the conversion to be shown in Balance sheet should be of 31st March of the filing year ?

  84. Sir,

    My resident status changed to NRI after 4 months of Indian Salary income in 2014-2015.

    I have rental income for 8 months in the Financial Year to be split between me and my wife as both are Co-owners of the flat.

    So when I file my IT Return as NRI, how should I calculate my taxable income?

    Taxable Income = Salary from Employer for 4 months (have my Form 16) + Rental Income * 0.5 (spouse to show other half as income) + Income from NRO Bank FDs.

    Tax calculation as per Slab.

    Rgds, Venkat

    Is my understand correct?

    • Yes, you will need to include all your Income in India

      Taxable Income = Salary from Employer for 4 months (have my Form 16) + Rental Income * 0.5 (spouse to show other half as income) + Income from NRO Bank FDs.

  85. Dear Vivek,
    I am an NRI based in Singapore. I dont have any income in India except for rent from a property of about INR 28,000 per month. The property is in both me and my wife’s name and the rent is deposited in an NRO account which is also in both our names. Are we liable to pay tax in India since by sharing the rent income it is below the minimum limit for both of us.

    • As the income is below taxable limit, you are not liable to submit return. However please check if any TDS is deducted by Bank in your NRO account, then you need to file the return and claim that TDS.

  86. Dear Vivek,

    I posted my query but it was not published or you did not approve. May I know the reason?

    I am again posting my query ..if you can reply it would be helpful..

    Can HUF can open NRE account or has it to be NRO account if the karta/manager of HUF is NRI/OCI?

    Also, I have some FCNR FD accounts . Till now I did not enter these details in Balance sheet as I thought that the Interest earned on FCNR FDs is tax free. But I presume although the interest is tax free I should still show these investments and balance of my FCNR A/C details in my balance sheet in a same way I show for my NRE FDs. What are your views? Should I show the FCNR, FDs and balance of FCNR A/C details in my Balance sheet? If yes, in which column of the Income Tax return because I could not locate it to enter in Foreign currency? Also, does the exchange rate applied for the conversion to be shown in Balance sheet should be of 31st March of the filing year ?

    Thanks in advance

    • Hi Vikas, I am currently addressing the queries from start of June and normally messages are automatically approved when replied.

      HUF can have an NRI status and therefore HUF should be able to open NRE/NRO account. However many public sector bansk are reluctant to open it. there is no clearly defined rule book where it says that HUF is allowed or disallowed. Private banks are more helpful in such cases.

      2) You should show FCNR FD as well in your balance sheet. You can use 31st March conversion rate.

  87. Hi,
    I work in oil field on ON-OFF pattern. During ON period I am in Dubai & during OFF period I stay in India with my family. Till last financial year I was working full time in India. My questions are –

    1- If I am unable to complete 183 days stay in Dubai this year (because almost 3 months in this FY is already over) & thus not qualify to be NRI but at the same time do not bring(transfer) my salary from the account opened by my employer in a local bank in Dubai to India, will I be liable to pay Tax on it. I plan to bring the money to India from next financial year, when I will be able to complete 183 days/year.

    2 – I have read that NRI can invest in stocks only through PIS (Portfolio Investment Scheme). But I already have investment in stocks which I plan to leave as it is, i.e. not do any transaction till the time my status is NRI (next 4-5 years). Is that possible or do I have to convert my present holding to PIS ?

    • 1) If you are in India for 182 days or more, then you will be treated as Resident in India and you need to show all Income (indian / overseas income) in the income tax returns and pay taxes accordingly. Even if you dono bring the money back in india in that year, you are still liable as the money is earned in that year.

      2) the right option is to notify your DMAT provider that your residential status has changed. they will be able to open new PIS account and transfer ot re-designate your DMAT account under PIS.

  88. Hi Vivek

    I was in india for 5 months in 2014 then came to US . I satisfy the previous 365 days clause in india. Shall I file as NRI or RES. And only india income right?

      • 1 Sept 2014. Yes for purpose of employment.

        If I understand it correct then I will have to show as NRI and show India income only. I have to claim refund for TDS deducted.

        All Your above posts and replies are really appreciated Vivek. Nice work

        • Hi Yogesh, As you were out of India for 182 or more and left India for employment, you will be treated as Non resident in India.
          You will have to show Indian Income only.

  89. Dear Sir / Madam,

    I am an NRI with income only from NRE/NRO interest, sale of shares and dividend from shares.

    The total income is not exceeding the basic exemption limit.

    TDS has been deducted on NRO interest.

    I am repaying my home loan.

    Please clarify the below.

    – If I do not want to claim refund of TDS, do I still need to file income tax returns?
    – If income tax returns for previous years had not been filed earlier, for how many years can be filed now?
    – Refund of TDS of how many years can be claimed now?

    Look forward to your reply.



    • Hi Vijay,

      1) if your income is below taxable limit, and you donot want to claim tds refund, there you are not required to file the return
      2) You can file returns for 2 years
      3) youc an claim refund for 2 years

  90. Hi Vivek,
    I m Woking offshore and I am also pensioner.Iam holding nre account.Iwork more than190days in a year (mostly out of India & sometimes in Indian waters) most of the company for which I work are situated out of India, even when I work in Indian waters for which I am paid in dollars & salary comes into my NRE account.

    For financial year 2013-14 I have filed e-return.and I have also declared my NRE income.
    I received a notice from IT dept 139(1) intimation to pay income tax. My status on that form is non resident.
    How do I rectify this.

    Please assist


  91. Hi Vivek,
    I have the following query –

    1. I was working in Germany from Sept.’12 to Nov.’14 and had opened an NRI account and transferred my overseas earning to NRI account. During my stay in Germany I had paid taxes in Germany.
    Now from Dec.’14 to Mar.’16, I will be in India and again back to Germany. Is my income under NRI account taxable in India during the period I had stayed in India?

    2. My wife has constantly stayed in Germany since Sept.’12 to till date and now she is employed there. Should I get the NRI account transferred in her name now?

    3. I am also planning to rent my house in India when I am leaving in Mar.’16. Should I get the rental income into my NRI account or should I open a separate NRI account for my wife & get it transferred there?

    Thanks in advance & looking forward to hear from you.

    • Hi Gaurav,

      1. Income in NRE account is not taxable. When you were back in India in Dec 2014, you should have informed bank to convert in Resident account.
      Ideally, the tax liability will only be on Interest earned on the balance amount (if interest is more than Rs 10000 as upto 10K deduction is allowed under 80TTA).

      2) You can open a joint or single NRE Account in her name. You cannot just transfer your NRE Account into her name.

      3) FOr income in India, you can only get it credited to normal india saving account or NRO Account. (Note NRO account is different from NRE Account – see the difference in the link below)

  92. Hi Vivek,

    I am in US since last 5 years and have been sending money from here to my regular resident account. Now I got a letter from IRS department asking me to explain all the money that has been coming to my account and withdrawals from my account (installments for a property I bought in India). The interest earned every year is not taxable and I can show receipts of the money I am giving for my house. Please recommend what else can I do to avoid any fines/ fees.


  93. HI sir,

    I am Raghavendra, i was in UAE from 01-Dec 2014 to 27 -May -2015 on contact work, i use to deposit the amount earned to Banks like ICICI /HDFC , just want to know whether i need to pay any tax for this in INDIA, AFTER COMING BACK TO INDIA I was UN EMPLOYED IN INDIA FROM MAY 2015 TO SEPTEMBER 2015.


  94. Hi,

    I am an Indian student pursuing Ph.D. in the US. I left India for the US in August 2015. I receive a stipend here that covers my education and living expenses. I would like to know the following:

    1. Am I a resident or non-resident for filing tax returns in India? This is the first time that I have travelled out of India to any country.

    2. Do I have to pay taxes in India on the stipend that I receive in the US?


    • If you are out of India for more than 182 days, then you are non -resident in India. You are not required to file returns in India if you have no income in India.

  95. Hi sir,
    I am an NRI last 10years based on muscat.I have 2 quarry
    1. I have resident account FD with yearly interest less than 2 lakh and NRE FD more than 2lakh,and i have no other income in india,should i require to submit income tax return file in India? NRE FD will mature after 2year but if I return India after 1 year then my matured amount will taxable on 2year interest earn?

    • 1. If your resident FD interest is less than Rs 2 lakhs, you are not required to file return as your Income in India is below tax slab. But please check if the bank have deducted any TDS on such FD interest. If yes, they you should file the return and claim the TDS refund.

      2. If you have NRE FD that will be matured after you are returning to India permanently, then you need to tell yoru Bank. Your bank will convert the NRE FD into normal FD and interest will be taxable going forward.

  96. I am NRI. I sold shares from my NRI account and made profit of around 1 lakh (STCG), on which capital gain tax was deducted. Later, I made a loss of 80000 through some other company’s shares.
    Please let me know whether complete 1 lakh profit is taxable or only 20000 INR. Can i file return to get the refund, if only 20000 is taxable?

    • Hi Pankaj, Whether all there transactions happened in same financial year. If yes, then you can adjust the loss against gain. You can file the returns and claim the additional tax paid.

  97. Hi I am an NRI whose income in India including ll sources is less than th taxable limit.

    I have got a Notice for non filing of income and ther are 5 clauses cib403, cib502, stt01,stt02,195,194A for FY 2013-2014.

    I have to answer them thru online compliance module. I can answer all but the CIB 502 which is contract above 10lakhs in a commodities ecchange as I dont have any account niether I trade in commodities. Please let me know what option to choose under the related information summary regarding CIB 502.


  98. An good article on E-filing provided. Electronically filed returns are faster than manual filing as the tax data is transmitted directly into the computers. The income tax return e-Filing has made our life very easy. Now most of the taxpayer don’t need the service of the chartered accountant. A salaried person can easily e-file income tax return using his form 16. Government is also trying hard to 100% shift to e-Filing. In 2013-14 , 2.96 crore income tax return has been filed through the e-Filing facility. While in 2014-15 the number increased to 3.41 crore. Appreciate the article.


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