Yes filing tax returns on Indian taxes have always been confusing, but thanks to the new changes and tax rules that Indian income tax department has brought. They have brought some new tax exemptions for NRIs, some great tax rates on India’s service tax, wealth tax, property tax, gift tax, income tax, capital gains tax, dividend taxes, India taxation on investments, real estate sale taxes, thus making the tax calculation easy for income tax return filing.
Although NRIs are living abroad and away from India, most of them still pay taxes in India. We have put together so tips for you to use on filing Income Tax in India. The tax in India for each year starts on April 1st and ends on March 31st. You have to add up your income for that year and pay taxes before the end of March every year. To get your income tax return, you need to file before the end of July every year. Most need to file for their Income Tax return with the form ITR-1.
Recently, the level of difficulty with filing your taxes has gone down a great deal. Some of the rules have changed. There is no tax until you reach 100,000 rupees. With 150,000 rupees, there is only 10 percent tax and for 250,000 there is only 20 percent tax. The rules also show that women do not have to pay taxes with any less than 135,000 rupees and men do not have to pay taxes with any less than 100,000 rupees. Some major tax deductions are from mutual funds, life insurance policies, some bonds, and many other investments. Most donations to institutions are free of tax. If you have invested, you need to send proof to the Income Tax Department. Consider all of the above and then do your taxes.
There are not very many investments that you can make today that will not be taxed. There were a lot more in the past. The investments that have interest free of tax are provident funds, earnings from the stock market, and dividends from mutual funds. To invest in the provident funds, you can do it through the State Bank of India and the Indian post offices. These will be free of tax.
The gains that you earn from the stock market and via mutual funds most likely do not have tax. Although the profits don’t have tax, there is still not guarantee that you will always profit. To earn money via the stock market, you need to study and practice a lot. For help, contact: www.learn-trade.com. There are companies and brokers that can help you manage your whole investing portfolio. You can find a lot of them on the internet.
Every citizen of India making money has to file a tax return every year. If you do not have any taxes to file, you need to file zero taxes every year. NRE accounts can be opened in some investment areas. These areas should be invested in be non-India citizens. Every citizen of India, living in India and living abroad, need to obtain a PAN card for tax purposes. PAN stands for Permanent account number or the tax number. It is given by the IT Department. For help with obtaining a PAN card from abroad, visit: www.nripan.com.
If you are not a Indian citizen and you have some sort of financial business or investments in India, you too need to have a PAN card. When it comes time to file your tax returns, if you are living abroad, you might get extra time depending on the circumstances. You will need to contact them before the deadline if you need extra time. Things have been made easier since they started accepting online tax return forms and allowed NRIs to download the Indian tax application forms, and also the money the government pays back in tax rebates can be directly put into your personal bank account in India. These tips should be helpful when doing your taxes in India.
Though it has made easy to file taxes online by the Indian government, at times still non resident Indians living abroad, especially in countries like USA – United States of America, UAE, Dubai, Qatar, Oman, U.K – United Kingdom, Australia, Canada face some confusion, thus it is advised to take professional help from some certified and registered CAs – Chartered Accountants. One good company offering NRI Tax services is: http://www.India-Tax.com