NRI Tax Return Filing- 8 Benefits of Filing ITR

As per tax laws applicable in India, every NRI needs to file their Income Tax Return on or before the due date in case his total income earned or received in India for a financial year exceeds the maximum exemption limit of Rs 2,50,000.

A question arises that in case if the total income of NRIs during a financial year is below the aforesaid taxable limit, in that case, whether NRI Tax return filing is advisable? In other words, whether NRIs are required to file their Income Tax Return even when it is below the taxable limit or under what circumstances, NRIs are advisable to file their tax return in India.

It may be noted that there are lots of benefits of NRI tax return filing in India even when it is not compulsory to file a tax returns owing to no taxable income in India.

Some of the benefits of NRI tax return filing in India are as under:

1)      Income Tax Return filing allows to carry forward the losses

In case NRIs has incurred any loss on sale of immovable property in India or on sale of shares and/or mutual funds, such losses will be allowed to be carried forward to be set off against future capital gains only when an Income tax return has been filed on or before the due date. Therefore, NRI Tax return filing in India is compulsory for carrying forward the losses.

2)      Income Tax Return filing allows claiming refund of TDS deducted

Normally, banks and other payers deduct TDS on payments made to NRIs at the highest tax rate slab which results in a refund of excess TDS deducted. NRIs can claim a refund of excess TDS deducted only by filing ITR.

3)      ITR filing helps in applying for Lower/NILTDS Certificate

In a situation, where NRIs have to approach the Income tax department for applying for lower or NIL TDS certificates, previous 2-3 years ITRs help the department in earlier processing of such application.

4)      ITR filing helps in the remittance of money abroad

At the time of remittance of money from NRO to NRE or NRO to outside Indian bank account, bankers require copies of form 15CA and 15CB from practicing chartered accountant and copies of ITR filing record provides assistance in the issuance of form 15CA and 15CB by chartered accountant conveniently.

5)      Copies of ITR as documentary evidence

Copies of ITR may be used as address proof or documentary evidence as an alternate documents before various government and revenue departments. Therefore, it is advisable to file an NRI Tax return in India.

6)      Avoidance of notice from tax authorities

Nowadays, the tax department IT cell has much information about the financial transactions of most people. Sometimes, due to the non-availability of information about the status of NRIs, they receive notice from the Investigation cell of the Tax department seeking information about foreign transactions. In case, NRIs are regular in filing ITR in India, they can avoid such notices from the Income tax department.

7)      Helps in getting loans from banks and financial institutions

In case NRIs want to apply for any loans from banks and financial institutions, copies of the last 3 years’ ITRs are required for the same. The same is the case with applications for a credit card. Therefore, tax return filing helps in getting loans from banks and financial institutions as well as for applying for credit cards.

8)      For applying for VISA

At the time of applying for a VISA, the financial worthiness of any person is ascertained on the basis of copies of ITR. Accordingly, ITR filing also helps in securing VISA for foreign travel.

Thus, from above, it may be inferred that there are many benefits of filing ITR in India by NRIs and they must continue to file their ITRs years after year, even if they are not liable to file ITR due to lower taxable income.