Q1. Who is considered an NRI for tax purposes?
An individual is considered to be NRI if they meet the following conditions:
- If they reside outside India for more than 182 days in a financial year; or
- If they stay in India for less than 60 days in the current financial year and less than 365 days in the preceding 4 financial years.
Q2. What are the common taxable incomes for NRIs in India?
- Income earned from property (rental income or capital gains).
- Income earned from Indian investments (interest on fixed deposits, dividends, etc.).
- Income earned from business or profession set up in India.
- Capital gains from the sale of assets associated with India.
Q3. Are there exemptions available for NRIs on capital gains?
Yes, NRIs can avail specific exemptions under sections 54, 54EC, and others based on the type of asset and reinvestment.
Q4. What are the new tax rates for NRI's selling listed equity shares and mutual funds units ?
The TDS on the sale of listed equity shares and equity mutual fund units has increased 20% for short term holdings and 12.5% for long term holdings.
Q5. How can NRIs avoid double taxation on capital gains?
NRIs can avail themselves of benefits under the Double Taxation Avoidance Agreement (DTAA) between India and their resident country.
Q6. Can an NRI get a refund for excess TDS deducted on capital gains?
Yes, if excess TDS has been deducted, NRIs can file an income tax return in India to claim a refund.
