About NRIs and income tax refunds...

'An NRI whose income is below the basic exemption limit (Rs 250,000) is required to file an income tax return in India if...'

Anil Rego, CEO, Right Horizons, answers your personal income tax queries

Simon Lobo: After our parents' death we children decided that one of us keep our flat valued approx at 1 lac and distribute the amount of the cost of the flat among us all.

My question is will my brother who decides to take the flat and pay us have to pay any tax or will we the recipients have to pay tax on the amount received.

Appreciate your assistance and anticipating a timely response.

Anil Rego: If your brother decides to buy out your share, then you would need to offer the amount received by you for capital gains. You can consider the proportional share of the cost of acquisition while computing the capital gain.

deepali shenoy: I had bought a LIC Policy in March-2010 with sum assured of Rs.1,87,000/- and premium payment of Rs.9000/- p.a. I surrendered the Policy in Nov-2020 & received a total of Rs.1 lakh plus including sum assured, bonus etc. Is this amount exempt from tax? In either case under which head should I show it while filing returns under ITR-1?

Anil Rego: The surrender value will be taxable if the sum assured is more than 5 times the annual premium. If taxable, the amount that you receive as surrender value would be treated as 'Income from other sources' and taxed at your existing tax bracket.

arvind kumar tandon: There has been delay in registering my mother as legal heir due to unavoidable circumstances aroused due to the death of her husband. As per guidelines of help desk the refund proceeds of deceased is possible whiling filing his ITR & not through wife (legal Heir of Deceased). I chose option as representative of deceased but unable to submit as a highlight propped up as FILING ARE NOT ALLOWED FOR THE ASSE SSMENT YEARS BEYOND ONE ASSESSMENT YEARS WITH RESPECT TO DATE OF DEATH. Screen shot of the same is also attached. My mother is a legal heir.

IN THI S CONTEXT MAY I REQUEST for CONDONATION REQUEST & ALLOW ME TO F ILE THE ITR FOR GETTING THE REFUND. Father died on 11.01.1918.

Anil Rego: I think there is some error in the mentioned year of death.

Suku Gosw: I had Indian Citizenship until about 6 years back, thereafter got foreign citizenship and surrendered Indian one. While in India I made my PAN card and filed tax accordingly. I have a few questions regarding Personal Income Tax. They are as below.

1. Does my PAN card need any updating?

Anil Rego: The PAN is not actually for Citizenship and you could continue to file your returns with the same PAN. If you would like to get your change of Citizenship updated, you would need to follow the same process of applying for a new PAN card. While doing so, you need to mention your old PAN card.

2. I have a rental income and income from dividend from shares, in India totaling less than INR 500000 a year

3. Dividend income is bank credited after tax deductions-

4. Do I need to file tax, if yes, how?

Anil Rego: An NRI whose income is below the basic exemption limit (Rs 2,50,000) is required to file an income tax return in India if: 

• One has short term capital gains on equity which is taxable
• One has long term capital gains on any asset, which are chargeable to tax
• Has any income chargeable to tax irrespective of the basic exemption limit.

Please note that Dividend Income is now taxable in the hands of investors; so tax has to be paid on those as well.

5. By filing tax will I be able to get the deducted tax back as refund?

Anil Rego: Yes, you should be able to claim a refund for tax deducted at source in India. This can be done by filing your returns. Accordingly, if excess tax is deducted, you would be able to claim a refund.

You may also look to take a tax credit if the country is covered under a DTAA with India.

prasanna prabhakar chatufale: I have question regarding tax on normal FD deposit. The bank reported in traces the interest as Rs 8376/- and it got prefilled in ITR1 under any other income as interest on deposit. As it is below 10k it is not taxable. So my question is under which clause I have to enter this amount in ITR1 for exemption.

Anil Rego: The deduction of Rs 10,000 is available for Savings Bank interest and not Fixed Deposit interest.

Do you have any personal income tax query? Please mail us at getahead@rediff.co.in with the subject line 'Ask Anil' and Anil Rego will answer all your tax queries.

Anil Rego is the founder and CEO of Right Horizons, an investment advisory and wealth management firm that focuses on providing financial solutions that are specific to customer needs.