Transactions NRIs need to report to Income Tax Department
Posted on October 01 2020
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Non Resident Indians (NRI’s) have various investments in India, like land and building, property, jewellery, cars and more. Many of these transactions are required by law to be reported in your Income Tax Returns every year. If you have not been reporting or accounting for these transactions in your Indian IT Returns then you may unknowingly increasing the probability of receiving an Income Tax Notice.
What are the transactions for a Non Resident Indian (NRI / PIO / OCI) which are reported to the Income Tax Department?
The IT Department in India nowadays gets loads of information on all transactions by regular channels across India and these transaction details have all the details of the Non Resident Indians (NRI) also. The Income Tax Department closely scrutinizes this information in different levels and Non Resident Indians (NRI / PIO / OCI) with balances in the NRE and NRO accounts, fixed deposits, credit and debit card transactions, mutual fund (debt and equity) and share investments, or purchase and sale of bonds and debentures are all under the eyes of the Income Tax Department. Sale or purchase of any property by a Non Resident Indian (NRI / OCI / PIO) attracts attention of the Tax Department. Hence it is best to be compliant with Income Tax law in India for a Non Resident Indian (NRI) and stay safe and sleep tight.
Under the Income Tax Act in India, as applicable to Non Resident Indians (NRI / OCI /PIO) details of most transactions are required to be furnished by the NRI in the NRI’s Income Tax Return and the organisation that the NRI is transacting with is also required to provide the details to the IT Department.
Under the Income Tax Act in India, as applicable to Non Resident Indians (NRI / OCI /PIO) details of most transactions are required to be furnished by the NRI in the NRI’s Income Tax Return and the organisation that the NRI is transacting with is also required to provide the details to the IT Department.
For example, if you have made any investments of say Rs 10 lakh in a Bond, the respective Bank or Company has to file the details of this investments with the IT Department for all Resident as well as Non Resident Indians and also for Corporate Houses.
Most Non Resident Indians invest in Deposits, Properties, Mutual Funds and Shares, etc, or they do high value transactions when they visit India on holidays or vacations, purchase jewellery or use their Debit and Credit Cards, or issue cheques. Each of the above transaction is reported to Reserve Bank of India or/and the Income Tax Department and it is very easy for the Income Tax Department to have a disconnect with your spending and your earnings as they have not been reported in the Income tax Returns. As the Indian economy is rapidly reducing cash transactions, most of your transactions are recorded with the RBI and ITD. So the only solution is to stay compliant and for Non Resident Indians it does not take much effort as it did earlier. You can do the Income Tax Return filing from overseas itself.
All in all, each and every transaction is nowadays reported with the Income Tax Department. If as a Non Resident Indian, you are not filing correct Income Tax Returns in India, it is only the non-effort that the Income Tax Department and the Officers of the Income Tax Department that can keep you safe.
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.
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