Depending on the residential status whether your income will be taxed or no in India. NRI are taxed depending on the income earned in India. Interest on the NRO account is exempt from tax.

1. Is It Necessary To File Income Tax
Return For The Interest Earned In
NRO Account?
August 2017

2. nri@TaxAssist.in | +91 98307 56567
Bangalore | Chennai | Delhi | Goa | Hyderabad | Kolkata | Mumbai | Pune
Is It Necessary To File Income Tax Return For The
Interest Earned In NRO Account?
Pooja lives and works in the UK. She checked her Form 26AS online and
found out that a TDS entry of Rs 20,000 is showing which was deducted
@30% on the interested earned in her NRO account. Whereas, she has no
other income in India other than that interest. She has no idea whether she
requires to pay tax for these interested earned or no. Should she file her
Income Tax Return in India?
Depending on the residential status whether your income will be taxed or no in
India.
Firstly, you should always find out the residential status. Since, Pooja is an
Indian Citizen and has gone abroad for employment; she will be a
Resident if she spends 182 days or more in India. She left India on 3rd
July 2015 and returned back to India on 15th March 2016. Therefore in the
financial year that began on 1st April 2015 and ends on 31st March 2016,
she has spent less than 182 days in India. Since she is an Indian Citizen
and gone abroad for employment, qualifying as a resident she requires to
stay in India for 182 days or more. Therefore, she is an NRI for the
purpose of Income Tax in India.
For Pooja, only the income earned or accumulated in India is taxable
whereas the income earned abroad is not since she is an NRI. NRI are
taxed depending on the income earned in India. Interest on the NRO
account is exempt from tax.

3. nri@TaxAssist.in | +91 98307 56567
Bangalore | Chennai | Delhi | Goa | Hyderabad | Kolkata | Mumbai | Pune
Pooja is required to add all her income that she earned in India. For example,
Pooja’s earned an interest on the NRO account of Rs. 80.000 as it is her income.
For financial year 2015-16, the minimum income which is exempt from tax is
Rs 3,00,000. Her total earned income in India is less than the minimum exempt
amount and therefore she’s not required to pay any tax on it. Therefore, there is
no tax which is payable by her but she is required to claim for a refund of the
TDS deducted on her interest income.
A refund can be claimed only by filing an IncomeTax Return for that particular
financial year. She decides to file an Income Tax Return to claim a refund of Rs
30,000. If you delay in filing your income tax return then your refund will also
get delayed.
With the help of Tax Assist and its team of income tax professionals, taxpayers
can minimize their Income Tax liability, maximize their net income and create
opportunities to save for current and future needs while maintaining proper
accounting standards and income tax returns which are compliant with the Law.

4. nri@TaxAssist.in | +91 98307 56567
Bangalore | Chennai | Delhi | Goa | Hyderabad | Kolkata | Mumbai | Pune
Tax Assist is an initiative of Alfred Jordan and specializes in International
Taxation. Tax Assist has offices across the Country and services Indians located
globally. For any queries or assistance you can mail at nri@TaxAssist.in.