Do I have to file in India if tax was already deducted?
Deduction at source and filing are two different obligations, and satisfying one does not discharge the other. India collects tax on most non-resident receipts before any exemption or deduction has been considered, so what is taken is frequently more than the liability the income actually carries. The return is where the real figure is computed and the difference recovered. It is also where treaty relief and the credit position for your other country are established in a form that will be accepted. Treating the deduction as a final settlement is common and it usually means paying more than is owed and leaving the obligation open.
I only earn interest on Indian deposits, is a return needed?
Often yes, and interest is the category most often left unfiled, because the money arrives net and feels finished. The bank deducts as the interest is credited, applying whatever classification it holds for you rather than the position you are actually in, and it has no way to take account of exemptions or of a treaty rate you may be entitled to. Without a return nothing computes the correct liability. There is also a practical reason beyond India: your other tax authority will generally want the Indian income and the Indian tax evidenced before allowing a credit, and a filed return is the strongest form that evidence can take.
Can I get back tax deducted at source on my Indian income?
Recovery generally comes through filing. Because the deduction is applied to a gross receipt before exemptions, reliefs or the actual cost of an asset are taken into account, the amount withheld routinely exceeds the tax the income really owes, and the return is the mechanism that computes the difference and claims it. Two things make this work: matching each deduction to the correct year under India's April to March year, and holding the payer's deduction records to support the claim. Where the receipt is a one-off, such as a sale, a certificate obtained before the payment is made will reduce what is held back in the first place.
I had no Indian income this year, do I still file?
A year with no Indian income does not necessarily mean a year with nothing to do, and the answer turns on your residence status and on what you hold rather than on what you received. Filing obligations can attach to holdings and to particular transactions, not only to income, and someone returning to Indian residence acquires reporting duties in respect of assets held abroad. The other consideration is continuity: where deposits, property or investments remain in India, an unbroken filing record makes later claims and later transactions considerably easier to support. Decide it on the facts of the year rather than on the absence of a receipt.
How does an Indian return fit with my Canadian or US return?
The two have to be reconciled rather than simply filed side by side. India's tax year runs from April to March, while Canada and the United States work to a calendar year, so a single Indian year straddles two foreign returns and a single foreign year takes in parts of two Indian ones. Income and the tax deducted on it therefore have to be reallocated to the periods your other return uses before a credit can be claimed. Keep the Indian deduction records by payer and by date, because the credit is claimed by category and by country and an unmatched figure is the usual reason it is refused.
I have not filed in India for years, what now?
Start by establishing your residence status for each of those years, because that decides what was required in each one, and the answer may not be the same throughout. Then assemble what was actually received and what was deducted, year by year, from the payers' records rather than from memory. In many cases the arrears turn out to be refund years rather than liability years, because deduction at source was applied to gross receipts. Bring the position up to date deliberately and in order, and take advice on the route to use before filing anything, since the approach differs depending on the years and the amounts involved.
Do NRIs pay tax on money sent to India?
Sending your own funds to India is a transfer of capital, not income, so the remittance itself is not taxed. What is taxable is income the money then earns in India — interest, rent, capital gains — under the rules for the account type it sits in. Sending money out of India is the direction that needs certification before the bank will act. See NRE, NRO and FCNR accounts.
Is my Indian provident fund or PPF still tax-free now that I live abroad?
The exemption is an Indian one, and it does not travel. Your new country of residence taxes worldwide income under its own rules, and several — the United States in particular — may treat the annual growth in a foreign retirement or savings plan as currently taxable and separately reportable, whether or not you withdrew anything. So an account that is genuinely tax-free in India can be a taxable, reportable asset where you now live. See Indian pensions received abroad.
