NRI Earning Abroad - What are the Tax Rules
Indians working overseas often hold NRI accounts so they can invest in their homeland. An NRI’s taxation is calculated according to his/her residential status in India. Salary received in India is taxable whereas salary received overseas, is not taxable in India. Some taxes are exempted in India when it comes to an NRI and this could be regarded as a benefit. Similarly, there are many taxation rules considering a non-resident having a personalized NRI banking account in India. Check out these major tax rules you need to know, being an NRI earning abroad.
NRIs can claim their tax returns in India under specific regulations. They can file their returns when they need refunds or when facing a financial loss that has to be carried forward. The important thing to notice is that it does not depend upon your salary. If you are someone who earns outside, taxation is done based on your residential status.
Double taxation is a pressing concern for NRIs. For them, tax might have to be paid twice, considering their residence in both the countries. But because of tax treaties, this could be avoided. Tax treaties ensure that they are paying tax only once. It is done by analyzing the country where income is generated. Tax is only collected from the country where the income is generated. As a result, tax remittance to India has to be paid only for income through Indian sources.
Indian residents have to pay tax for their savings bank account. But for an NRI, this is not an issue. NRIs can have either a non-resident external account or a foreign currency non-resident account (FCNR) and get exemption from taxes. So, for NRIs it is easier to hold an NRI account without having to worry about taxes applicable on it. Banks also provide NRI investment plans to encourage NRIs to invest more in India.
Knowing all of these tax rules ensures that any NRI who is planning to invest in India is well informed about the tax scenario applicable on their investment.
You can also visit YES BANK's website to know more about their Savings Account and Fixed Deposit and Personal Loan.