An Income Tax Return (ITR) is a tax form that is used to file the income details and tax thereon with the Income Tax Department. Tax returns are required to be filed every year for any person whose income during the year exceeds the threshold limit whether through salary, property rental, dividends, interest, capital gains, from any business/ profession or other sources.
The due date for filing of individual tax returns is 31ST of July.
- Determining Residential Status
- Assessing Taxable Income
- Incorporating Income based Deduction
- Calculation of Tax
- Filing of Income Tax Return
An individual person will be considered as an Indian resident for a financial year:
- If he/she has resided in India for atleast 182 days during the said financial year.
- If he/she has resided for atleast 60 days in the said financial year and for 365 days in last 4 years.
If you are in employment abroad or a crew member of Indian Ship or a Person of Indian Origin(PIO) then only first condition is applicable. PIO is a person whose parents or grandparents were born in undivided India.
If you as an individual do not fall under above criteria, then you are an NRI.
All income of a resident individual is taxable, may it be outside India or within India. However, if you are Non-Resident, then only those income which is earned or accrued in India is taxable under Income Tax Act,1961.
In that context, if you receive your salary in your Indian account or someone else does on your behalf, then such moneys will be subject to tax according to prevailing tax laws of our country.
Income such as from
- Salary received outside India for services rendered within India.
- Salary received within India for services rendered outside India.
- House property income situated in India.(i.e. rental payments)
- Interest income earned as saving bank interest and from other investment.
- Business income which is setup or controlled in India.
- Capital gain from sale or transfer of any capital held in India.
INCOME BASED DEDUCTION
Income Tax Act provides various tax benefits schemes which can help you reduce your tax liability.
Deduction under 80C: Allows a maximum deduction of Rs. 1.5 lakhs from your gross total income for F.Y. 2018-19.
- Having LIC policy in your name/wife/child.
- Tuition fees payment of 2 children.
- Principal re-payment of home loan.
- Investing in Unit-Linked Insurance plans.
Deduction under 80D: NRIs can claim a deduction for premium paid for health insurance.
Deduction is allowed upto:
- Rs 50,000 for senior citizens.
- Rs 25,000 for insurance of self, spouse, and dependent children.
- Insurance of parents (father or mother or both) up to Rs. 50,000 if their parents are senior citizens, and Rs 25,000 if the parents are not senior citizens.
- Preventive health check-ups payment upto Rs.5000/-.
Deduction under 80E:NRIs can claim a deduction of interest paid on an education loan.
This deduction is allowed, if the loan is taken for:
- Higher Education of the individual.
- Higher Education of spouse.
- Higher Education of children.
- Higher Education of student for whom individual is a legal guardian.
There is no limit on the amount which can be claimed as deduction and is restricted to only interest repayment. This benefit is available for a maximum of 8 years.
Deduction under 80G: If NRIs has donated for any social causes then it will get deductions under 80G.
Deduction under 80TTA: NRIs can also claim deduction of interest income earned on saving bank A/c upto Rs. 10,000/-.
Many more deductions available for any Indian citizen are also applicable for NRIs except a few. Exemption under various scheme of investment for capital gain income (i.e. 54, 54EC, 54F) are also applicable forNRIs.
CALCULATION OF TAX
The Income tax of the NRIs will be calculatedaccording to its slab rate applicable on him. Such tax will be calculated after considering all income-based deduction and other heads of income. The total tax liability is the amount of income tax on the net total income plus interest liability (if any).
FILING OF INCOME TAX RETURN
Applylegal team provides you with team of tax experts, who will assist you in each step of return filing process and file your tax return just @Rs. 2950/-. Our tax team will be at your service and you can contact them whenever you feel so and your tax filing process will be completed within 2 days of document submission.
Reach out to us for a hassle-free filing of Income tax Return.