In every family most likely there is an individual who is working abroad after having completed his education in India. The member has put all his efforts to study well and pursue greener pastures abroad. It is not necessary that the person has to be in a job as he may be in a business. There could be scenarios where a person may be involved in a business in India. But the individual may be working full time abroad. Though the income may be from both ends, he has to be bear the NRI income . In such cases it is better to avail the expert advice of an NRI tax consultant Pune who can guide you in this process.
NRI taxation is a different from of taxation on the income of people who are residing abroad and the income source is steady. Before you obtain the tagline of an NRI, and go on to impose NRI taxation when it comes to the income of any individual it helps to determine eligibility of an individual. If the individual complies with specific residential criteria for a viable tenure in India or outside would ensure they fall under the category of NRI taxation.
NRI and the taxable sources of income
- The background is important- the residential status of an individual is an indicator of the taxation status of the person. It would be dependent upon the location and origin of the person. If the source of income belongs to India, then he would be taxed as per the income tax act. But if an individual is a permanent citizen abroad, the NRI taxation would be only applicable to the income from India. NRI tax advisor in Pune can guide you on what are the sources of taxation.
- Variation from income sources- NRI taxation is imposed on an individual who is providing service in India. If you are planning to transfer any asset in India at a considerable amount of money or capital gains then you would fall in the category of NRI income tax. It would also be applicable on rental income in India for any fixed deposits or tangible income.
Tax deductions for NRIs
There are various ways by which an NRI may claim deduction on their taxable income. When it is life insurance policies they can claim tax deductions. It is going to exempt certain portions of life insurance if it does fall into the category of spouse or child of an individual. The premium amount needs to be less than a particular percentage amount on the principle amount.
Tax exemption is there if there are paying a fixed EMI on the loan amount. The purpose of loan can be residential or commercial property. In addition the loan amount needs to include the stamp duty and registration amount.
Apart from all these the NRI deductions would be applicable to educational requirements. Any parent who wishes their kids to study in prestigious institutes can claim tax deduction as a whole.