UAE NRI: ITR Filing in India mandatory or not, what is deadline

Many Indians who are living in the UAE and have Non-Resident Status are under confusion if they are required to file Income Tax Return (ITR) in India or Not. Through this article, let us try to resolve the same.

Residential Status of the taxpayer

First, one is required to find our residential status. Obviously, if you are resident, then 100% of your income, including the global income, is taxable in India.

In case you are a Non-Resident as per Income Tax, then only the Income which accrues or arises in India is taxable.

Even if you have Non-Resident Status, ITR Filing might be required:

For Non-Residents, Income which accrues or arises in India is taxable. So UAI NRIs need to be careful on Incomes like:

• Interest income from fixed deposits, bonds and NRO accounts,
• Rent from from Property in India,
• Capital Gain from sale of shares, Mutual Funds etc. in India,
• Capital Gain on sale of property in India,
• Salary earned for work done in India or paid by the Indian Government,
• Gold business income from ventures controlled or operated in India,

Please note that interest earned on NRE and FCNR deposits is not subject to taxation.

Do NRIs get the Slab Benefit?

Yes, NRIs also get the slab benefit. So if your Income is up to Rs. 250,000 (nearly AED 10,787), you are exempt from Income Tax or Filing the tax return. However, NRIs with an income above Rs. 250,000 must file the return.

Additionally, NRIs whose income is more than Rs 1 Crore (nearly AED 431,513.43) must also report their Indian assets and liabilities.

Can NRIs opt for the New Tax Regime?

Yes, NRI can opt for the New Tax Regime. In that case, if your Income is up to Rs. 300,000 (nearly AED 12,945), you are exempt from Income Tax or Filing the tax return.

However, it is advisable to file Income Tax Return if you have Income in India even if your income is below the slab limit.

Can an NRI Claim 7 Lakh Rebate Benefit (FY 2024-25?

No, Rebate benefit is only allowed to individual resident in India and not Non-Residents.

Due Date of Filing ITR

Indians who are living in the UAE should file their Income Tax Returns (ITR) for FY 2024-25 before the due date of September 15, 2025. Filing your ITR in time would avoid any unnecessary penalties and ensure compliance with Indian Tax Laws.

Tax Rates on Capital Gains

The increased tax rates for capital gains are effective from July 23, 2024. The long-term capital gains (LTCG) are subject to 12.5% tax and short-term capital gains (STCG) are taxed at 20%. The previous rates for LTCG and STCG were 10% and 15%, respectively.

Documents required for Filing ITR

The expatriates should get ready with their documents to ensure correct filing. These documents include bank statements, investment proofs, interest certificates, property documents, capital gains reports, rental agreements and identification documents such as Aadhaar, PAN, and passport with UAE visa or Emirates ID. Along with these documents, the details of unlisted shares and home loan interest certificates are needed.

TDS deduction is not equivalent to ITR Filing

Many NRIs think that there is no need to file an ITR if TDS (Tax Deducted at Source) has been deducted. Please understand that TDS deduction is not equivalent to ITR Filing and Non-Filing of ITR can invite unwarranted Interest and penalties. Also, you need to file an ITR to claim a refund in case excess TDS/ TCS has been deducted from your Income.

It is important to file ITR before the due date as it offers many benefits, including claiming TDS refunds, carrying forward losses to offset future gains, and serving as income proof for loan approval. It also offers other benefits, such as supporting claims in compensation cases for the self-employed.