Q. I EARNED INCOME FROM various investments in the financial year (FY) 2013-14: Rs.7,600 as interest from non-resident ordinary (NRO) account; Rs.33,000 as interest from non-resident external (NRE) account; Rs.7,200 as interest from Public Provident FUND (PPF); Rs.1.45 lakh as rental income; Rs.1,800 as dividend income; and Rs.1,317 was deducted as tax from source from the NRO account. Dividend income is from shares and mutual FUNDS bought four years ago. I have not sold or bought shares or property in FY2013-14. I have paid Rs.73,000 as interest on home loan. Do I have to pay tax in India for FY2013-14?

Assuming that you are a non-resident (NRI) for income tax purposes, only income accruing or arising or received or deemed to accrue or arise in India would be subject to tax in India. Interest earned from NRE account, dividend income and interest income from PPF are tax exempt. Further, in computing the income chargeable under the head ‘income from house property’, you will be eligible to claim a standard deduction of 30% of annual value of the property. Assuming that the rental income earned by you represents the annual value of the property, you will be eligible to claim a standard deduction of Rs.43,500. Further, you will also be eligible to claim the entire amount of home loan interest paid as deduction against rental income earned if the same home loan interest pertains to the amount borrowed for acquisition or construction of the let-out property. Assuming that you are not eligible to claim any other deductions or exemptions, your gross total income consequent to the above adjustments to the total income would be Rs.36,100. Since, your gross total income does not exceed the maximum amount not chargeable to tax of Rs.2 lakh, you will not be required to file a return of income for FY2013-14. However, if you wish to claim a refund of the taxes withheld at source on the interest income received from your NRO account, you could consider filing a return of income.