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Income tax filing for nri income

21 June 2015

Dear Experts, I have some clarification regarding Income tax filing for NRI. For eg. Mr. X is NRI and has been transferring his salary income to his NRI bank Account in Indian . From NRI bank account , he again transferred to his wife SAVING ACCOUNT. Mr. X’s wife is deposited all the amount in FD and earned interest on FD.No TDS deducted on interest because she submitted form 15 H To BANK. My request for our Experts is what are all impact with respect to Income Tax Act for both Mr X as well as his wife with respect to above transaction and how to file Income tax return, Thanks in advance for your help. With regards, V.Krishnamoorthy

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2 Replies

Rashi Bajaj (CA) (752 Points)
Replied 22 June 2015

As far as transfer to NRI account is considered, there is no tax liability.

However, clubbing provisions will be attracted here as Mr. X is NRI who has kind of given a gift to his wife. Income from investing the so called gift is liable to be clubbed in Mr. X's income. Now since, he is NRI and he has no other income taxable in India, the interest may fall below taxable limit and be tax free.

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V KRISHNAMOORTHY (CMA) (25 Points)
Replied 22 June 2015

Originally posted by : Rashi Bajaj

As far as transfer to NRI account is considered, there is no tax liability.

However, clubbing provisions will be attracted here as Mr. X is NRI who has kind of given a gift to his wife. Income from investing the so called gift is liable to be clubbed in Mr. X's income. Now since, he is NRI and he has no other income taxable in India, the interest may fall below taxable limit and be tax free.

Hi,

Thanks for your details explanation. i have some clarification regarding ITfiling:

1. Whether Mr. X need to file IT return after cluebing all interest income of himself as well as his wife ?

2. or Mr.X' wife need to file sepratly?

3. Mr.X need to pay Gift tax? Which is best option ?

Thanks in advance for your help.

With regards,

V.K