July 31st is the last date for filing your Indian incometax returns for the financial year 2010-2011. If you are a Non Resident Indian (NRI) and are looking at the best way to file your tax returns, here is a quick guide on various options, including e-filing. This guide will also help you understand if you need to file a return in the first place. ( For Full coverage on what's buzzing in the NRI community click on our special coverage on NRIs )
Who should file returns?
If you are an NRI, you would have to file yourincome tax returns for 2010-2011 if you fulfill either of these conditions:
> Your taxable income in India during the year 2010-2011 was above the basic exemption limit of Rs 1.6 lakh OR
> You have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit.
Note: The enhanced exemption limit for senior citizens and women is applicable only to residents and not to non-residents.
Are there any exceptions?
Yes, there are two exceptions:
> If your taxable income consisted only of investment income (interest) and/or capital gains income and if tax has been deducted at source from such income, you do not have to file your tax returns.
> If you earned long term capital gains from the sale of equity shares or equity mutual funds, you do not have to pay any tax and therefore you do not have to include that in your tax return
Tip: You may also file a tax return if you have to claim a refund. This may happen where the tax deducted at source is more than the actual tax liability. Suppose your taxable income for the year was below Rs 1.6 lakh but the bank deducted tax at source on your interest amount, you can claim a refund by filing your tax return.
Another instance is when you have a capital loss that can be set-off against capital gains. Tax may have been deducted at source on the capital gains, but you can set-off (or carry forward) capital loss against the gain and lower your actual tax liability. In such cases, you would need to file a tax return.
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