I am an NRI, who had the following income in India in AY 11-12 (FY 10-11):
1. Interest income in NRO and NRE bank accounts- TDS deducted.
2. Dividend income into NRO account: No tax liability.
3. Inherited family house sold in August 2010, where my share was around `9 lakh. The house was inherited in 2005 and the total sale consideration was `27 lakh. The proceeds have been reinvested in another residential house. Am I obligated to file a return of income in India? — R Singh
The law is that if your income in India (before claiming any deductions) is more than `160,000 (for FY 10-11), then you need to file your tax return. Here, by income we mean taxable income (excludes tax-free incomes like NRE interest, long-term capital gains on equity etc.) Your income, especially on account of the capital gains, could be over the above figure. Though you have invested in another property thereby perhaps making the tax liability nil, nonetheless, the gross income (before deduction) if above `160,000, tax return filing becomes mandatory. Some experts would argue that Sec. 54 (exemption on account of buying new property) is an exemption and not a deduction. Therefore, gross income is below the limit. The ITO may or may not agree with this. Therefore, we would suggest filing a return (with nil tax) in any case so as to avoid any ambiguity.
1. Interest income in NRO and NRE bank accounts- TDS deducted.
2. Dividend income into NRO account: No tax liability.
3. Inherited family house sold in August 2010, where my share was around `9 lakh. The house was inherited in 2005 and the total sale consideration was `27 lakh. The proceeds have been reinvested in another residential house. Am I obligated to file a return of income in India? — R Singh
The law is that if your income in India (before claiming any deductions) is more than `160,000 (for FY 10-11), then you need to file your tax return. Here, by income we mean taxable income (excludes tax-free incomes like NRE interest, long-term capital gains on equity etc.) Your income, especially on account of the capital gains, could be over the above figure. Though you have invested in another property thereby perhaps making the tax liability nil, nonetheless, the gross income (before deduction) if above `160,000, tax return filing becomes mandatory. Some experts would argue that Sec. 54 (exemption on account of buying new property) is an exemption and not a deduction. Therefore, gross income is below the limit. The ITO may or may not agree with this. Therefore, we would suggest filing a return (with nil tax) in any case so as to avoid any ambiguity.
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