Income arising from Indian assets is taxable for NRIs
They would be under an obligation to file an income tax return in India
Q. I have a showroom in Dubai. In 2011, I deposited Rs.3 crore in a non-resident ordinary (NRO) account in the form of fixed deposit. I want to transfer the amount from NRO to a non-residential external (NRE) account. Is it compulsory to give Form 15CB and 15CA to banks? Who has to file these forms? The bank has deducted tax at source when it credited the interest amount. What is the ceiling for transfer from NRO to NRE during a year?
Expert Comment: Under the NRO account regulations, you are permitted to transfer a maximum of $1 million per FINANCIAL year to your NRE account. All remittances out of the NRO account are subject to production of documentary evidence in support of acquisition by the remitter and an undertaking by the remitter along with a certificate by a chartered accountant in Form 15CA and 15CB. The transfer will be subject to payment of applicable taxes. So far the amount being transferred to the NRE account represents balances that are already subject to tax or exempt, hence, there shouldn’t be additional tax.
I am a non-resident Indian (NRI) and have a piece of agricultural land and an apartment in India. I earn agriculture income and rental income from these two. Do I need to file income tax return? If yes, kindly advice on the procedure. Also, can an NRI buy agricultural or farmland in India?
non-resident would be subject to taxes in India on any income accruing or arising from an asset located in India. As per the Indian tax laws, the agricultural income earned by you would be exempt, whereas the rental income from the house property would be subject to tax. You would be under an obligation to file an income tax return in India on or before 31 July 2014 for FINANCIAL year 2013-14 if your taxable income exceeds Rs.2 lakh in the previous year. However, you may note that the income tax law prescribes a specific method of computing taxable income where the taxpayer has earned agricultural income. While this type of income is exempt from tax, it is nonetheless included in the total income for rate purposes.
In case your taxable income exceeds Rs.5 lakh in the previous year, you would be required to file the return of income electronically either using the digital signature or through submission of the verification Form ITR-V after electronically filing the return of income. In case your income does not exceed the above limit, you would also have an option to file the return of income in paper form.
People residing outside India (including NRIs and Persons of Indian Origin) are not allowed to buy agricultural property, plantation or a farm house.