Non-Resident Indians (NRIs) are required to file taxes in India, regardless of their place of residence.
This is due to the fact that Indian citizens are subject to the Indian tax regime and are liable to pay taxes on their income, regardless of where it was earned.
This includes income from salaries, investments, property, capital gains, business profits, and other sources. In most cases, taxes are deducted at source (TDS) from the income earned in India, and the balance is taxable.
In addition to filing an Income Tax Return, NRIs must also file a Wealth Tax Return if their assets exceed a certain threshold.
Non-residents are also required to pay taxes on any gifts received from family or friends, as well as on any winnings from lotteries or gambling.
In order to avoid double taxation, NRIs can take advantage of the Double Taxation Avoidance Agreement (DTAA) between India and the country of their residence.
Under the DTAA, tax payments made in one country can be used to offset tax liabilities in the other.
In addition, NRIs can claim various deductions and exemptions to reduce their tax liability. These include deductions for housing loan interest payments, investments in certain approved schemes, medical expenses, and donations to charitable organizations.
In summary, NRIs are required to file taxes in India and pay taxes on their income and wealth. However, they can take advantage of various deductions and exemptions to reduce their tax liability. They can also benefit from the DTAA to avoid double taxation.