NRIs usually have earnings in India in the form of dividends, pension, salary, and housing or commercial property. If their Indian income exceeds the exemption amount, NRIs should file their income tax return (ITR) for income earned/ collected in India. Generally, NRIs are confident about disclosing their Indian income at the time of income tax filing, but many NRIs and expatriates are still confused about revealing their overseas accounts in the tax return in India. But do NRIs need to disclose foreign bank account information in tax returns?
Also Read: Income Tax e-filing: Top 10 NRI Income Tax Filing Benefits
Note: The deadline for Income Tax Return (ITR) filing for AY 2021-22 has now been extended by three months to Dec 31st, 2021.
Do NRIs need to disclose foreign bank account information in tax returns?
On 24th July, 2017, the Income Tax Department in a press release clarified that it is not mandatory for NRIs to disclose the details of their overseas bank accounts while filing ITR in India. To claim a refund, they should mention the NRI bank account held by them in India. If you don’t have a bank account in India, then you can share the details of your foreign bank account with the tax department to get the credit of such refunds.
Earlier NRIs who did not have a bank account in India used to face difficulty in getting a refund because there was no column in the return form for sharing details of their bank account held abroad to claim refund. On the request of representations from NRIs, the Income Tax Department provided the facility for reporting the foreign bank account details in the return forms to allow NRIs to claim refunds.
Therefore, it is not mandatory for NRIs to share the details of their foreign bank account in the return of income if they are not claiming the refund or they have a bank account in India to claim the refund.
The refund amount claimed by a taxpayer on the processing of return of income is directly transferred to the bank account of the taxpayer. For direct credit of refund in a bank account, you must furnish the details of bank accounts in which the refund is to be credited.
Also Read: 5 Ways to save on the tax NRIs have to pay
Do NRIs have to declare foreign assets?
No, NRIs are not required to disclose their foreign assets and foreign account details. However, in case of NRI income tax, you must furnish information about the foreign accounts to claim a refund of taxes if you don’t have an NRI account.
What types of income are subject to NRI income tax
NRIs need to file an income tax return in India if they have taxable income in India, such as an NRI earning rental income in India would be liable to file an income tax return in India, if the rental income exceeds the exemption amount. The following types of income are subject to NRI income tax:
- Any income that is generated or accrues in India
- An income that is deemed to accrue in India
- Income that is received in India
- Any income that is deemed to be received in India
Also Read: Tax Slab for NRIs 2021-22: Everything about NRI Taxation
Due to a complicated tax system, understanding tax laws can be confusing and NRIs may miss claiming deductions and other benefits. At SBNRI, we understand this struggle. You can download SBNRI App to connect with our NRI Income Tax Experts and get end-to-end assistance related to NRI tax filing. SBNRI will also help you get a lower TDS Certificate.
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