I am an NRI. So far I have not filed any income tax. My Indian income is INR 19000 per month through rental income.

I am having a resident demat account and having stocks. I have few MFs for which money is deducted from my wife's resident bank account. My wife is not working and she is with me. I am also having SSY for my daughters and continuing.

Is it okay to have the above accounts being an NRI? Can you please advise course correction if needed?

Ans: Your NRI status depends on the number of days spent in India. If you stay between 120 and 183 days, you typically remain an NRI, especially if your income in India exceeds Rs 15 lakh. As an NRI, your global income is not taxable in India, but your investments in equity, mutual funds, and AIFs are subject to Indian taxes.

For equity, LTCG over Rs 1.25 lakh is taxed at 12.5%, and STCG at 25%. Debt mutual funds' CG is taxed as per your slab rate. AIFs' taxation depends on their category.

Monitor your days in India to maintain NRI status and avoid becoming a Resident, which would increase your tax liability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: The statement you found is mostly correct. Here's a breakdown of tax implications for NRIs in India:

Basic Exemption Limit:

Yes, NRIs are eligible for a basic exemption limit of ?2.5 lakhs on their total taxable income earned in India during a financial year. This means if your income from Indian sources (including bank deposits, shares, mutual funds, but excluding PPF interest) is less than ?2.5 lakhs, you generally don't need to pay taxes or file an income tax return in India.
Taxable Income for NRIs:

Interest income earned on NRO accounts is taxable in India.
Dividend income from Indian companies is generally taxable in India at a rate of 20% (plus surcharge and cess if applicable).
Capital gains from selling shares or equity mutual funds in India are taxable depending on the type and holding period of the investment.
Rental income from property in India is taxable.
NRIs and PPF:

NRIs cannot open new PPF accounts, but they can continue to contribute to existing PPF accounts opened while they were resident Indians.
The good news is that interest income earned on PPF and the maturity amount are completely tax-free for everyone, regardless of residential status.
Filing Income Tax Returns:

Even if your total income is below ?2.5 lakhs, you might still need to file an income tax return in India if you want to claim a tax refund on TDS (Tax Deducted at Source) deducted from your income, such as on interest from NRO accounts.
NRIs are advised to consult with a qualified tax advisor or chartered accountant familiar with NRI taxation to determine their filing requirements and tax liabilities.
In summary, while the ?2.5 lakh limit is a general guideline, it's important to consider all your income sources in India and the specific tax treatment of each to determine your tax filing obligations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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