73% of NRIs plan to file ITR by July: SBNRI survey

A recent survey conducted by SBNRI, an NRI-first fintech platform, reveals that 73% of NRIs (non-resident Indians) are keen on filing their income tax returns (ITRs) for the year 2023-24 by July. The firm, which offers seamless investment and NRI taxation also said that 19% of NRIs have already filed their returns, projecting a high level of awareness and intent for tax compliance. A small 8% of them do not have any plans to file their ITRs.

Despite not residing in the country, NRIs must file Income Tax Returns. Initially, NRIs usually need to file income tax returns if their income in India goes beyond a certain limit (₹2.5 lakh under the current rules or ₹3 lakh under the new rules as of 2024).

Moreover, NRIs need to fill out a different ITR form than resident filers. For instance, NRIs can no longer use ITR-1. However, they can still claim deductions and exemptions on their income in India, just like residents do (such as deductions under Section 80C of the Income Tax Act, 1961).

The survey found that a small number (3%) of NRIs in the US do not plan to file their Income Tax Returns (ITRs). In contrast, NRIs based in the UK show a stronger tendency to file their ITRs before the deadline compared to those in the US.

Additionally, NRIs from other countries show a greater interest in filing their ITRs by July (25%). The data shows that most of the NRIs are keen to meet the ITR filing deadline.

These data are very important for policymakers and service providers to meet the specific needs of the NRI community and ensure a seamless and efficient tax filing process.

As an NRI, filing income tax returns can be overwhelming due to several factors. It is difficult to determine their tax residency status because NRIs often have to manage income from multiple countries. Hence, reporting of their global income is a cumbersome process.

Tax responsibilities also apply to income earned abroad and certain types of accounts. The type of income (like salary, rent, dividends) and the accounts (NRE or NRO) where it's kept can affect tax duties in India. NRE accounts, holding foreign income, usually provide tax advantages, while NRO accounts, holding Indian income, may be subject to taxes.