NRI Income Tax / NRIs can save income tax through these methods, savings can be in lakhs

NRI Income Tax: Millions of Non-Resident Indians (NRIs) of India live in different countries of the world. These people have gone away from their homeland in search of better livelihood and earning opportunities. However, their citizenship relationship is still connected to India. It is often seen that NRIs earn abroad and make property or other investments in India through their family and relatives.

Under the income tax laws of India, NRIs have to pay tax only on the income earned in India. This includes rental income, interest from bank deposits, or income from buying and selling of property. Saving income tax for NRIs can be a complex process, but it can be simplified with the right information and techniques.

1. Getting a Tax Residency Certificate (TRC)

Tax Residency Certificate (TRC) is an important document for saving tax. If an NRI is investing in two countries and there is a Double Taxation Agreement (DTA) between the two countries, then he can pay tax in only one country through TRC. This can avoid the problem of double taxation, and more savings can be made on income.

2. Use of Form 10F

Form 10F is a document that certifies the eligibility of an individual or entity to avail tax benefits under the Double Taxation Agreement (DTAA). This form is mandatory for NRIs to avail tax benefits in India. It consists of two main parts:

The first part, which contains the statement made by the NRI.

The second part, which contains the certification by the tax authority in the NRI's resident country.

This form is valid for the financial year and needs to be submitted on time.

3. Simplifying e-verification

In the age of digitalization, filing income tax online has become easy. But the process of e-verification for NRIs is still full of challenges.

NRIs face difficulties in e-verification due to not having an Indian mobile number. It should be enabled through a foreign mobile number or email.

There is a demand to extend the current 30-day deadline for physical verification so that there is no hassle due to logistical delays.

Conclusion

Investing and income tax management in India can be challenging for NRIs, but it can be made easier with the right planning and processes. Using Tax Residency Certificate and Form 10F, NRIs can not only avoid double taxation but also save a large part of their income. Along with this, making the e-verification process more convenient by the government will provide great relief to NRIs.

It is important for NRIs to understand the income tax rules and keep the required documents ready on time. This will not only help them save tax but also successfully fulfill their financial objectives.