NRIs need not file ITR for interest income below taxable limit

 


Non-resident Indians (NRIs) are liable to pay tax in India on income that is received or is deemed to be received in India during the previous year or income that has accrued or arisen to such NRI in India during the previous year. Income earned abroad by NRI is not taxed in India and same shall be taxed abroad. The obligation to furnish ITR shall arise where the total income (earned in India) exceeds maximum amount not chargeable to tax (Rs 2.5 lakh) Hence, furnishing of ITR in respect of interest income, being below taxable limit, is not required.

Assuming that you are a resident individual, deriving income in the nature of salary, you shall be liable to pay tax on your global income in India, being income received by you from Indian company as well as income derived from overseas sources and same shall be taxable at the applicable slab rates. As a salaried individual, you can claim certain deductions/ exemptions available under I-T Act.

As per the I-T Act, exemption of HRA is permissible where expenses have been incurred on payment of rent in respect of residential accommodation occupied by the individual. However, exemption is not available if an employee resides in his own house or does not incur any expenditure on payment of rent. It has been held in several cases that in the normal course, a taxpayer would not pay rent to his spouse or parent. Such arrangements have been considered a sham to reduce tax liability. Thus, payment of rent to close relatives shall not be considered to be legitimate payments in the absence of substantive/cogent documentary evidence to prove the same.

Source: Financial Express

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