Is an NRI liable to pay IT and file returns in FY 2023-24 for interest earned which is less than Rs.5000? There is no other earning in India.

Ans: Non resident is liable to file ITR in India if income is more than exemption limit.

Further, an individual has to file his ITR irrespective of their income level, for cases like :

- If an individual has deposited more than Rs 1 crore or Rs 50 lakh in one or more current and savings bank accounts, respectively.
- If an individual has incurred an expenditure exceeding Rs 2 lakh for himself or any other person for foreign travel.
- Has incurred an expenditure exceeding Rs 1 lakh toward electricity payment in a year.
- Is a beneficial owner or beneficiary of any asset outside India.
- Is a signatory to a foreign bank account.

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I was a NRE and I am having NRE FDR maturing at different dates. I have come to settle in India. My question is do I need to file IT returns? But the interest is from my NRE FDs. Please advise me in details considering me as a lay man.

Ans: Interest earned on NRE FDs is exempt from tax till the time a person is non-resident in India as per provisions of FEMA, 1999. As you have come to settle in India, for the purpose of taxing FD Interest income, you may be treated as a Resident and entire Interest income may be taxed.

Regarding filing income tax return, person is required to file Income tax return in following scenarios:

1. If income is above Rs.2.5 lakh in a Financial Year; or

2. Further following specified persons are also required to file income tax return even if earned income is below Rs.2.5 lakh:

a. People with Sales turnover of Rs 60 lakh and above from Business

b. Professional income exceeding Rs 10 lakh

c. TDS or TCS of Rs 25,000 or more (Rs 50,000 or more in case of senior citizen) - even if person don't want to claim refund

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g. Where there is an income from foreign sources for resident

h. Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India

i. If you are a Resident and a signing authority in a foreign account

Apart from above, it is also advised to file ITR in following situations, if same is applicable in your case:

If TDS is deducted by payer of income, filing income tax return makes you eligible to claim refund with interest @6% p.a. - If person wants to carry forward certain loss to future years, it is advisable to file return
Proof of return filing is also asked when a person applies for a loan or a visa. So in future, if you are planning to apply for the same, it is advisable to file income tax return if you have earned reasonable income which makes you eligible for application.

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