For NRIs, staying compliant with Indian tax regulations is vital to avoid penalties. Here are some key steps to ensure proper communication and filing with the Income Tax Department.
- Update Your Income Tax Profile
The first step for NRIs is to ensure their online income tax profile is up-to-date. This can be done by registering on the official Income Tax Department portal at incometax.gov.in. Providing accurate contact details, including email and phone number, is crucial. This ensures that all communication from the department reaches the right person. If you are a non-resident, make sure to select the appropriate residential status on the portal and update details like passport number and citizenship status.
- Maintain a Current Email Address
Most communication from the Income Tax Department happens online. By updating your email address on the portal, you ensure that you receive notifications for any pending actions, notices, or updates. Designate a primary email for tax-related communication and a secondary email for the CA's communication. Additionally, make sure your foreign phone number is registered for OTPs (One-Time Passwords) to receive messages directly from the department.
- Check for Pending Compliance and Demands
NRIs must regularly check if there are any pending compliance requirements or outstanding demands from the tax department. These can arise if the department sends notices to an inactive or incorrect email address. It is important to address any such demands or notices promptly to avoid penalties. Even if you have not received a notice, you should still ensure you are up-to-date with your filings.
- File Your Tax Return Despite TDS Deductions
Many NRIs mistakenly believe that if TDS (Tax Deducted at Source) has been deducted from their income, they do not need to file a tax return. However, TDS deductions and filing a tax return are separate processes. Even if TDS has been deducted, you must file your income tax return in India. This will ensure compliance and avoid any issues in the future.
- Link Your Aadhaar with PAN
Linking your Aadhaar with your PAN is a mandatory step for NRIs who have Aadhaar. This linkage helps the tax department in processing your returns efficiently and avoiding issues with the PAN being flagged as inactive. If you haven't linked your Aadhaar with PAN yet, it’s crucial to do so immediately.
- Respond to Notices Promptly
In case you receive any notices from the tax department, it is critical to respond promptly. Even if you haven't received a notice due to issues with your email address or contact details, you cannot ignore the notices. Failing to do so may result in penalties and other complications.
Conclusion
NRIs must be proactive in staying compliant with Indian tax laws to avoid any future issues. By updating contact details, responding to notices, and ensuring tax returns are filed even when TDS is deducted, NRIs can safeguard themselves from penalties and legal complications. Staying on top of these compliance steps will help you maintain a clean record with the Indian Income Tax Department.
Disclaimer: Aim of this article is to give basic knowledge about the topic to people who are not in touch with Indian tax norms. When anybody is dealing with these kinds of cases practically, he shall consider all relevant provisions of all applicable Laws like FEMA/Income Tax/RBI /Companies Act etc.
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