First check if you have earned any income in India/from India: e.g.
- Sales of Property located in India
- Interest on Fixed Deposit, Saving Bank/NRO Account
- Sale of Shares, Mutual Funds, Bonds
- Amount received against any Services provided in India
- Rental Income on Property/Assets located in India
Next for you is to verify if Indian Payer (Your Customer, Tenant, Buyer of Property/Shares/Mutual Funds etc.) have deducted any Tax? There may not have any deduction of tax in India, but your income in India is in excess of INR 250,000, then what will you do? You may like to know the required compliances in Indian and also how to get refund of your taxes as deducted in India.
We have summarized here all such frequently asked questions- FAQ
1) Do I need to have a Permanent Account Number (PAN) in India?
• In case your income is more than INR 250,000 in India, you must have a PAN and also you must file an Annual Tax Return in India
• There can be several other need to have a PAN in India e.g. Investment in Property, Shares, Other Assets.
• Please click the clink for more detailed information on this topic (https://entryindia.com/articles/how-nris-and-foreign-organizations-can-get-pan-card-india)
2) Do I need to file Income Tax Return in India?
• In case you don’t have any income or the income is below INR 250,000, you don’t need to file your Income Tax Return in India.
• In case your income in India e.g. interest on Savings Account/Fixed Deposits, Rental Income etc. exceeds Rs.2,50,000, then you it’s must for you to file a tax return in India.
3) Can I get a refund of TDS in India?
• Unless you file your Tax Return in India, you cannot get refund of any taxes deducted (even on income below INR 250,000)
• You must file your tax return to get refund of any Taxes that are deducted in India.
4) Can I check my 26AS (Application of Income Tax in India) to know if any Tax is Deducted at my PAN)?
• In case you have a PAN and your registered it at Income Tax (www.incometaxindiaefiling.gov.in), you can view/download Form 26AS, which will show the Income Earned and Taxes Deducted, if any
• All Indian Banks also offer to view/download 26AS, once you are logged in in your Bank Account.
• Details at 26AS is updated by the deductors of Tax on a Quarterly basis (Apr-June, July-Sep, Oct-Dec, Jan-Mar) and the updation is visible there within 1 month subsequent to the last quarter. As we are in June, the 26AS will be fully updated for the whole Financial year i.e. 2018-19 by now.
5) I/My Firm overseas have an income from India, wherein Tax @20% or even higher rate got deducted. Can I avoid it?
• In case of NRI/OCI overseas or a Firm outside India, the Indian Payer will deduct TDS (Tax Withholding) even if the amount does nto exceed INR 250,000.
• In case you/Your Organisation overseas is not having Indian PAN, please check your India customer must have deducted Tax @20% or even at a higher rate.
• Unfortunately such tax deducted in India can also not utilized as a Credit in your Home Country, even if there is a ‘Double Taxation Avoidence Agreement- DTAA” with India and your country overseas.
• In case you are writing any service invoice to a customer in India, you must have Indian PAN in order to avoid Tax Deduction at 20% of higher rates. Getting PAN is One Time exercise.
6) I/My Firm overseas have earned an income from India, wherein Tax has been Deducted there based on DTAA. Do I need to file a Tax Return in India?
• You must need to file a Tax Return in India, in case you earned any income from here and specially when any taxes got deducted.
• In such a case, even if you/Your business is not registered in India, you must need to file your Tax Return in India
• Indian Tax Authorities send ‘Notices’ at your overseas address asking reason of not filing the Income Tax Return abd may impose penalties as well.
7) As a NRI/OCI can I take benefits of Section 80C?
• Investment in permitted instruments under section 80C of Indian Income Tax help in reducing the Taxes and its permitted for NRI/OCI
• A foreign national or an overseas Firm/Business however cannot avail any benefit under section 80C
8) Can I get my refund in my overseas Bank Account? What is the timeline to get Refund?
• Refund on valid income tax returns can be claimed in an overseas bank
• Generally it takes 6 months to get the refunds. In some cases it ma take little longer time.
9) Can I file my Indian Income Tax Return my own or Do I need to hire a local tax consultant?
• Its fully online and anyone with requisite information can file it easily
• Hiring a local tax consultant will be very helpful in ‘Selection of appropriate Tax Forms, claiming all the eligible benefits, filing it correctly to avoid any future repercussion.
10) What is the due date? What is I am not able to file on/before Due Date?
In case of Individuals (NRIs/OCIs/Foreign Nationals) Income Tax Return for the Financial Year (April 01, 2018 till March 31, 2019) is required to be filed by July 31, 2019.
• INR 5,000 Penalty if filed after July 31, 2019 but before December 31, 2019
• INR 10,000 Penalty if filed after December 31, 2019 but before March 31, 2020
• No permission to file after March 31, 2020
About the Author
With over 15 years of experience, Shashi Mohan has been instrumental in formulating strategy for Entry India, Business Set-up and Operational Management of over 150 overseas brands from USA, Europe, GCC and South East Asian countries in India. He is a member of our ‘Expert Panel’ at Entry India. Shashi can be reached at email@example.com or +91 9818 700 482