Report Wire - How will international earnings be taxed in India?

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How will international earnings be taxed in India?

3 min read

My NRI and OCI cardholder son is pondering of shopping for a home in his resident nation. Is it crucial for him to point out it in his ITR in India? If sure, then through which type?



An NRI (non-resident Indian) is required to file an earnings tax return when…

• The complete earnings earned or accrued in India exceeds the fundamental exemption restrict of ₹2.5 lakh.

• He/she has earned earnings from investments in India.

• He/she needs to assert a TDS refund for tax deducted on curiosity, rental earnings, and many others.

• He/she needs to set off present yr losses or carry ahead and set off losses in subsequent years.

If an NRI doesn’t meet the above circumstances, he/she might not be mandatorily required to file ITR in India. In case an NRI is required to file an ITR, he/she can not file ITR-1 and should file ITR-2 or ITR-3. Depending upon whether or not he/she has earnings from a home property, he/she could should report such earnings within the ITR. As such disclosure of properties held will not be required. Disclosure of property below Schedule AL (Schedule Assets and Liabilities) is required when complete earnings of the taxpayer as reported within the ITR exceeds ₹50 lakh. In such a case NRIs should report property located in India.

Also, reporting of overseas property is a should for a ‘Resident Individual’ below Schedule FA (overseas property); however it isn’t relevant to NRIs.


We moved to Australia in 2015. We are now not residents of India. Recently, my father inherited some fastened deposits, rental property and different investments. Does he want to use for a brand new PAN, or can he use the earlier one?

—Name withheld on request


Your father can request for change or replace particulars within the PAN card. If a person already has a PAN card and later turns into an NRI, then they’ll proceed utilizing the identical PAN card. Alternatively, it’s simpler to simply replace your KYC in banks and on your investments.


I do business from home in India for a US-based firm. My wage is credited to an account within the US in {dollars} after which transferred to my Indian account. How will I be taxed on my earnings?

—Name withheld on request


According to the residential standing guidelines of the Income Tax Act, you’ll be categorised as a ‘resident’ in India for tax functions. A resident will likely be liable to pay tax on their international earnings. Hence, salaries earned from the US firm may even be taxable in India. However, India has a Double Tax Avoidance Agreement (DTAA) with the US. Hence, it is possible for you to to assert the tax credit score of the TDS deducted within the US out of your tax legal responsibility arising in India. DTAA makes positive {that a} taxpayer will not be doubly taxed for the earnings earned outdoors the nation of residence. Taking the good thing about DTAA entails acquiring a tax residency certificates (TRC) that helps determine and certify your tax residency standing.

Archit Gupta is founder, chief govt officer, ClearTax.

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