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Business News/ Money / Calculators/  File your returns to claim refund of excess taxes paid
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File your returns to claim refund of excess taxes paid

For RNORs, interest earned on foreign currency deposits with a scheduled bank is not taxed

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I am returning to India after 30 years. When I return, should I pay income tax from that financial year itself?

—Lokesh

The taxability of income would depend on your residential status; one has to determine the number of days you have stayed in India during each financial year (FY). One would qualify as a resident in India if her stay has exceeded 182 days or more during the FY or has stayed in India for 60 days or more in the current FY and for 365 days or more in the previous four FYs. Further, a person is considered to be a resident but not ordinarily resident (RNOR) if such person has been a non-resident in India in nine out of 10 previous years or has during the seven previous years been in India for a period of 729 days or less. I presume that you would be coming to India in the month of December 2014 and so your stay in India, though less than 182 days, would be more than 60 days in FY2014-15. Considering that you have been a non-resident Indian (NRI) for the past 30 years, your stay in India would not have exceeded 365 days in the previous four FYs cumulatively. You would be considered as an NRI as per the Indian tax laws and taxed only on India sourced income for FY2014–15. If you are taxed on your global income (including the India-sourced income) in the country in which you are a resident for FY2014-15, you would be eligible to claim credit of the taxes paid in India under the relevant double taxation avoidance agreement. For the subsequent years, depending on the number of days of your stay in India, you may qualify to be an RNOR in India. If you qualify to be an RNOR, interest earned on foreign currency deposits with a scheduled bank would not be taxable.

If I pay tax deducted at source and have no other income in India, how do I claim tax refund? I have not filed tax return in India for around five years now.

—Ganesh Shankar

Refund of excess taxes paid could be claimed by filing return of income in India. You could file a belated return. However, the time limit for doing so is one year from the end of the assessment year (AY) in which the return was to be filed. So, for FY2012-13 (i.e. AY2013-14) and FY2013–14 (AY2014–15), you could file your return on or before 31 March 2015 and 31 March 2016, respectively, and claim the refund of excess taxes paid. For the previous FYs, in the absence of return filed, you could make an application to the Central Board of Direct Taxes. It can issue instructions or directions to the income tax authorities to admit an application or claim for any exemption, deduction, refund or any other relief after the expiry of the period specified under the Act.

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Published: 18 Dec 2014, 06:38 PM IST
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