Claim a refund on LTCG tax: There are various sources of income or NRI investment options in India. However, as per Indian tax laws, an NRI can receive payment only after the deduction of TDS, even if their income is less than Rs. 2.5 lakh per annum.
TDS is deducted on long-term capital gains (LTCG) and short-term capital gains (STCG) earned by NRIs on mutual funds, shares, bonds, rental income, sale of property, stocks, NRO accounts, etc. Interest on NRE and FCNR accounts is tax-exempt.
However, NRIs can claim a refund on LTCG and STCG at the time of filing his/ her Income Tax Return. We will explain how NRIs can claim a refund on LTCG tax.
For any tax and refund related queries, help and get a lower TDS certificate, you can connect with an NRI tax expert right away. Click the button below.
TDS for NRIs
Under Section 195, TDS is deducted on most common types of incomes earned by NRIs in India, such as:
- Rental income earned from property in India
- TDS on sale of property by NRIs
- Interest earned on NRO accounts and FDs
- TDS on sale of shares, mutual funds and bonds
- Fund received for any services offered in India
Note: NRIs are not required to pay TDS on interest from NRE and FCNR accounts
How Can NRIs claim a refund on LTCG tax
As mentioned above, TDS is deducted on both long-term and short-term capital gains earned by NRIs. NRI needs to share PAN details for TDS deduction. Once the deductor files their TDS return and deposits the TDS amount with the government, the deduction appears on the NRI’s Form 26AS.
At the end of the financial year, an NRI taxpayer can estimate his/ her total taxable income and tax liability on such income as per the NRI tax slab rate. In case there is no tax due, NRI is allowed to claim a refund of the excess TDS deducted at the time of filing of his ITR.
To claim a refund of the TDS deducted, the NRI needs to file an income tax return in India after the end of the financial year.
Lower TDS certificate for NRIs
Tax laws are very harsh for NRIs and they need to pay a higher tax. However, NRIs can apply for a lower TDS certificate to avoid high taxation rules. SBNRI can help you get a lower TDS Certificate easily.
Important points regarding claiming a refund on LTCG for NRIs
- Normally, the TDS refund is issued in 6 months for NRIs. Sometimes, it may take longer.
- The refund is released with interest applicable from the end of the financial year.
There are various deductions under Section 80C of the Income Tax Act that will help NRIs save income tax in India.
There are various ways to save income tax in India, but due to a complicated tax system and recurrent amendments, understanding tax laws can be confusing, especially for NRIs. NRIs may miss claiming deductions and other benefits. At SBNRI, we understand this struggle. You can download SBNRI App to connect with our NRI Tax Experts to know more about new TDS/ TCS rules for NRIs. You will also get end-to-end assistance related to NRI tax filing.