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1 Reason for a NRI / PIO / OCI to get an Income Tax Notice

The most often reason for a Non Resident Indian (NRI / PIO / OCI) based in UK, US, UAE/Middle East and Singapore, to get an Income Tax Notice from India is:

Income Tax Notice due to Non-Filing of Income Tax Returns.

income tax notice

In such a case, the Income Tax Department in India can send a NMS Income Tax Notice to the Non Resident Indian (NRI), which may or may not, specify few transactions and ask the NRI to file the Income Tax Returns and give a response for that particular Assessment Year. It is advisable to respond to the Income Tax Notice received by the NRI, within the given time or an extension can be taken with a proper reason, otherwise, there may be chances of you being penalised with a financial penalty as well as persecution.

Such an Income Tax Notice can be sent for any of the previous six assessment years to the (Non Resident Indian) Assessee and there are provisions being envisaged where the Income Tax Department will be able to open your tax file of the previous 15 years.

Hence it is important that as a NRI you File your Income Tax Returns in India and that too on time.

In case of late Income Tax Return filing, the ITD can levy a penalty of Rs 5,000 a year on you. However, the penalty is generally not being implemented and is not mandatory and depends upon the discretion of the Assessing Officer.

However, if there is no default in paying tax, the taxpayer is usually not penalised for late filing however the probability of the penalty is still present.

If any tax is due to the ITD, the department charges 1% interest per month from the due date which can go as high as 3% interest per month.

As a Non Resident Indian please File your Income Tax Returns in India on time and correctly and stay compliant. We have seen that 80% of NRI’s who file their Income Tax Returns in India get a Income Tax Refund rather than having to pay any Taxes in India.

Over 11 Lakh PANs has been Deactivated by the Government. Know if Yours is Still Active?

pan-card-status

As the deadline of linking Aadhaar with PAN has come to an end by the 31st of August, it is essential to check if your PAN is still active.

Recently, over 11 lakh PAN cards has been deactivated by the Income Tax Department to fetch out fake and duplicate PANs. The main targets are the individuals who are having multiple PAN cards and those with PAN cards issued under fake documents. Blocking fake PAN cards can help the government restrain identity theft and purchase of benami properties.

It is essential to check if your PAN is still active or no, as the deadline to link Aadhaar with PAN has come to an end on 31st of August.

To check if your PAN card is still active, the steps are given below: –

> You can go to the e-filing (www.incometaxindiaefiling.gov.in) website.

> Click on ‘Know Your PAN‘, which you will find on the left side of the page.

> After you click on it a page opens up where you need to fill in your details.

> You will receive an OTP in the mobile number given. Enter the OTP and it will show if you PAN is active or no.

Deadline for linking Aadhaar and PAN extended to December 31

Aadhaar

The Income Tax Department has extended the deadline to link with the Aadhaar by 31st of December, which is good news for the taxpayers. Earlier, the department had said that the tax returns filed without linking of Aadhaar and PAN would not be taken up for processing unless the two were linked by 31st of August, 2017.

There is a huge relief to those taxpayers who had filed their income tax returns (ITR) by the due date of 5th of August, 2017, but were not able to link their PAN with the Aadhaar by 31st of August, 2017.

31st of December will be notified by the revenue department as the due date for linkage. This comes at a time when the government has allowed a similar extension for the furnishing of Aadhaar for availing the advantages of numerous social welfare schemes.

The Supreme Court has also posted the matter for the next hearing in November where the hearing petitions are challenging the government's decision on Aadhaar.

Section 139 AA (2) of the Income Tax Act says that every person who is having PAN as on 1st of July, 2017 and is qualifies to attain Aadhaar, should intimate his Aadhaar number to the tax authorities. Therefore, those classified as non-resident Indians as per income tax laws, people who are not citizens of India, those above 80 years of age and residents of Assam, Meghalaya and Jammu and Kashmir had been excluded from this requirement, if they do not have Aadhaar or an Aadhaar enrolment ID.

On 31st of July, the tax department stated that but a finding is made that Aadhaar is naturally not authentic, tax return filers will require to link their PAN with Aadhaar by the 31st of August, 2017.

Why is your Income Tax Returns important for Accidental Death & Compensation?

How can your Accidental Death & Compensation Increase due to Income Tax Returns?

(Income Tax Return Required)

Income Tax Returns have become very important even for Claiming Accidental Death compensation for family members of the deceased.

As per the Supreme Court
If a person is filing his Income Tax Returns for the last three years and has an accidental death, then the government is obliged to give ten times the average annual income of the last three years to that person's family.

Yes, you will be surprised by this, but this is right and it is Government rule.

For example, if someone's annual income is 4 lakh 5 lakhs and 6 lakhs in the first, second and third years respectively, its average income is ten times of five lakhs. Means fifty Lac rupees, family of that person is entitled to receive from the Government.

In the absence of much information, people do not take this claim with the Government.

If any return is missing, mainly last three years, this could lower the claim amount or even no claim because court takes ITR as only evidence.

NO wealth record, FD's; business etc; is given that much importance as compared to the ITR in the eyes of law.

Many a time, people do not file ITRs regularly or it will be taken lightly.

Do get your Income Tax File in order. God willing you will not need it for this purposes, however it becomes very important in case of any accidental death for your family and family’s financial security.

Source -
Section 166 of the Motor act, 1988 (Supreme Court Judgment under Civil/ Appeal No. 9858 of 2013, arising out of SLP (c) No. 1056 of 2008) Dt. 31 Oct. 2013.

Spread the word. Let someone's family benefit.

Is It Necessary To File Income Tax Return For The Interest Earned In NRO Account?

Tax Filing 17

Pooja lives and works in the UK. She checked her Form 26AS online and found out that a TDS entry of Rs 20,000 is showing which was deducted @30% on the interested earned in her NRO account. Whereas, she has no other income in India other than that interest. She has no idea whether she requires to pay tax for these interested earned or no. Should she file her Income Tax Return in India?

Depending on the residential status whether your income will be taxed or no in India.

Firstly, you should always find out the residential status. Since, Pooja is an Indian Citizen and has gone abroad for employment; she will be a Resident if she spends 182 days or more in India. She left India on 3rd July 2015 and returned back to India on 15th March 2016. Therefore in the financial year that began on 1st April 2015 and ends on 31st March 2016, she has spent less than 182 days in India. Since she is an Indian Citizen and gone abroad for employment, qualifying as a resident she requires to stay in India for 182 days or more. Therefore, she is an NRI for the purpose of Income Tax in India.

For Pooja, only the income earned or accumulated in India is taxable whereas the income earned abroad is not since she is an NRI. NRI are taxed depending on the income earned in India. Interest on the NRO account is exempt from tax.

Pooja is required to add all her income that she earned in India. For example, Pooja’s earned an interest on the NRO account of Rs. 80.000 as it is her income. For financial year 2015-16, the minimum income which is exempt from tax is Rs 3,00,000. Her total earned income in India is less than the minimum exempt amount and therefore she’s not required to pay any tax on it. Therefore, there is no tax which is payable by her but she is required to claim for a refund of the TDS deducted on her interest income.

A refund can be claimed only by filing an Income Tax Return for that particular financial year. She decides to file an Income Tax Return to claim a refund of Rs 30,000. If you delay in filing your income tax return then your refund will also get delayed.

With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.

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