Top Tax Tips for Non-Resident Indians (NRIs)

Tax management can be especially tough for the NRIs. Not only they have to stay up to date with the taxation rules in their foreign country of residence but in India as well. If you are an NRI, then you are expected do some things differently than other ordinary Indians, but first- you must know how to determine your residential status.

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You are considered an NRI for a particular financial year if you don’t meet any of the following conditions:

• You were in India for at least 6 months in a particular fiscal.
• You were in India for 60 days in the previous year and lived for a minimum of 365 days in total in the last four years.

What’s Taxable?

If you are a resident Indian, i.e. you meet any of the two conditions mentioned above then your global income is taxable in India. However, if you are an NRI then the income earned in India only, is taxable.

The following are some tips on saving money as an NRI:

• By opening an NRE (Non-Resident Rupee) account you can save your foreign earnings in India and also avoid TDS deductions.
• You can enjoy tax exemptions on certain earnings such as Interest earned on Foreign Currency Non-Resident, Dividend income from Indian Public/Private Company, Indian Mutual Funds incomes, etc.
• You are allowed to deduct taxes from your home loan interest amount or education loan interest amount just like ordinary Indians.

Apart from the above, there are many other ways for NRIs to save taxes and make sound investments. For instance, you can invest in ELSS, tax-free bonds, etc.