Income tax obligations for citizens and NRIs – Points to note

Income tax on individuals is levied running business individually or in partnership, on both Residents and Non Resident Indians (NRIs), though the nature of tax levied on NRIs differs with those of resident citizens.

Basically partners associated with any trade or business, their goods, properties, shares, assets are all taxable. Tax Audit is an obligation on persons carrying out business, to get their accounts audited by a professional Chartered Accountant (CA). Tax levied on an individual depends on his income whether earned or gained directly through his business or Job (In terms of his salary) or an indirect income, a house property which is being used for a business or for a professional purpose. But here also our law gives us a benefit. If this property is being used for a family’s residential purpose or self occupied then in this case income tax is nil. But If a house is let out for rent then the income per annum is taxable.

Secondly if a house is being used for a business or professional purpose then the income earned from that respective business is taxable under the Income Tax Act. Now we will discuss the tax on goods in any business, especially the digital goods purchased from the internet, some are free but all others are taxable. When we purchase goods online through some website we do pay some tax for that particular item. There is an interest which you are paying. All Properties are taxable. Income earned from shares is also taxable. For assets, as we all know, we pay a tax at the time of purchasing.

Now the question arises how to save money from this tax? In other words is there really a way to save our income from the income tax department, I would say yes.  You can save money through LIC policies, Medical Policies, Car Insurance etc. Loans on education for a person in your family or for the person whom you are the guardian, Interest levied on them is exempt from tax. Coming back to NRI Services in India, here we do offer various services like banking and management services for NRIs.

In fact there are companies who are giving a piece of mind to Tax Audit Reports, and provide a range of financial services. Not paying the tax is a punishable offense in India. Tax not paid or delayed can have a toll on you at the end of the year and for a serious offense like misinterpreting the facts necessary in income tax evaluation, it can lead to a more serious kind of punishment in the eyes of law.