Non residents can take benefit of the basic exemption limit

Arnav PandyaMany non resident Indians now have a Permanent Account Number (PAN) as this is required for several of their investments in the country. In addition a lot of people who have a PAN but then later left the country to go abroad would also have stopped filing their income tax returns in the country. There is a nagging worry among these people about the implication of holding the PAN and whether they can also file their returns and get some tax that has been deducted at source back from the income tax department. On all these fronts the situation is positive for the individuals as they can ensure that their position is protected. Here is a look at some of these points in detail.Filing returnA non resident Indian who has a PAN can file their income tax return in the country if they want to. They will have to include all the income that would be taxable in the country and this would have to be shown and if necessary the required tax can be paid on the taxable income. However if there is no income or the income that is earned during the year is below the taxable limit then the non resident need not file their income tax returns. Thus there are conditions where they would not require a filing of their tax return and this is a bit of good news for them as they are freed from the annual worry especially if there is no income that is arising in the country.TDSThere are however several situations wherein the non resident Indian finds that some entity has deducted tax against their PAN and then paid them just the net amount instead of the full figure. Two such areas where this is common is that of the receipt of interest on fixed deposits and then in case of sale of shares. If the deposits are NRO deposits then there is a good chance that the bank has deducted tax at the time of payment of the interest on these deposits. In case of sale of shares there might also be a deduction at source and when this happens the individual often finds themselves in a bit of worry. They might not have any income that exceeds the taxable limit so the question for them is to ensure that the deducted amount comes back to them. The answer is simple which is that they would have to file their returns and claim a refund which would be given back to them on the completion of the assessment.Benefits presentOne point that the non resident investor should keep in mind when they are filing their income tax return is that they can claim a few benefits that are available for their resident counterparts. One of these is that of the basic exemption limit. The basic exemption limit is the figure after which the individual will have to pay tax. For the financial year 2015-16 this is at Rs 2.5 lakh for a person who is less than 60 years of age while it is Rs 3 lakh for those between 60 and 79 years and then Rs 5 lakh for those who are 80 years and above. This limit is available for the non resident Indian also and what this means is that they can calculate the total taxable income that they earn in India for the purpose of the return filing. If this is less than this figure and there is some tax deducted then the whole of the tax deducted would be eligible to be refunded but even if their taxable income in the country crosses the basic exemption limit then the tax on this figure would be compared to the TDS to see if they need to pay more tax or actually get a refund.