Advance tax and self-assessment for NRIs — what does India require?

Where you have Indian income that deduction at source does not fully cover, yes. India collects tax during the year rather than after it, so the liability is estimated across the year and paid in instalments. Non-residents are often caught here because they assume the deductions their Indian payers make discharge everything. Where those deductions fall short of the eventual liability, the balance was due in instalments as the year ran, and interest runs from those dates rather than from the date the return is filed.

Because the question is not only how much you paid but when you paid it. Interest runs both for deferring an instalment and for falling short on one, so settling the whole liability at the end of the year still leaves interest for the instalments that went unpaid on their dates. This surprises people who have only filed in countries where the balance is simply paid with the return. The remedy is not retrospective: it is to estimate the year properly and pay as the year runs.

Yes. Deduction at source reduces the base on which instalments are computed, so the instalment is worked out on the part of the liability that the deductions do not already cover. That is why the instalment position has to be recomputed when the deductions change during the year, rather than fixed once at the start of it. Income suffering no deduction at all, or a deduction at a rate well below the eventual liability, is where an instalment obligation most often arises unnoticed.

Very possibly, and this is the part people miss. A certificate reducing the rate deducted at source reduces what is collected for you during the year, which raises the amount of liability left uncovered, which is the base the instalments are computed on. So the certificate moves cash out of a deduction you did not control and into an instalment you do. Plan the instalment schedule at the same time as the certificate, not when the return is prepared. By then the instalment dates have passed.

An estimate is what is asked for, so it is made on the information available at the date of each instalment and revised as the year develops. For rental income that means working from the tenancy in place, the deductions the tenant or agent is making, and the expenses you can reasonably expect, then revising when a tenancy ends or a large repair falls due. Keep the workings for each revision. If the estimate is questioned later, what you knew and when you knew it is the answer.

A gain arising late in the year cannot have been estimated at the earlier instalment dates, and the instalment computation follows the point at which income arises rather than spreading it evenly across the year regardless. What matters in practice is that the estimate is revised as soon as the gain is known and that the revision is documented, so the position taken on deferment can be explained from a working paper written at the time instead of reconstructed long afterwards.

They clear a payment out of India. Form 15CA is the remitter's declaration of the payment and the tax withheld on it; Form 15CB is an accountant's certificate on the taxability of the amount, the treaty article relied on and the correct withholding rate. The bank generally will not execute the transfer without them, in the categories where they are required. The work is deciding the rate correctly, because the certificate is the record of that decision. See 15CA and 15CB certification.

Residence in India is decided by days present in the tax year, with a second limb that also counts days over the preceding four years, and separate rules for Indian citizens leaving for employment. Fall outside the tests and you are non-resident, taxed in India only on Indian-source income. Between full residence and non-residence sits RNOR — resident but not ordinarily resident — which shelters foreign income for a limited window after returning. See RNOR status.