Income tax on Rent income & Interest amount from Savings A/C

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Srini Cherukupalli (Querist)
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22 March 2008 Dear Sir / Madam,

I am an NRI from U.S. I have the following questions related to Income tax.

1. I have purchased property (Residential flat) in India by taking home loan and now, I want to show this on my tax returns for tax exemption. Do I need to request bank for certificate with details of all EMI-payments (principal & interest seperately) for this?. Please tell me the exact procedure on this.

2. If I get below 1 lakh / Annum rent income from above said property which is rented out to a private party then
is it taxable (I don't have any other income in India other than this and of course I have overseas income(salary))?
If it is taxable how much percentage? Is there any way to get tax exemption on this?

3. I will get Rs. 500 (approx) as interest for the year April 2007- March 2008 from my Savings A/C in India (I usually remit the money to this savings A/C from my Overseas Bank A/C). Is it taxable? Do I need to furnish these details in my tax
returns? If so, Do I need to get the Interest certificate from the Bank seperately?

Thanks a lot for your valuable information on this.

Regards,
Srini.

Jitender

Jitender (Expert)
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22 March 2008 1 u can request to the bank. they generally provide this easily.
2 ) then there will be no tax.
3 ) prima facie it seems that u have taxable income less than Rs 1,10000.therefore no tax will be levied.

R.V.RAO

R.V.RAO (Expert)
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22 March 2008 taxabiliyty of interest of nri bank accounts as follows:
1.non resident -external -nre account interest is tax free.
2.NRO ACCOUNT INTEREST IS TAXABLE.
3.NRNR ACCOUNT INTERST IS TAX FREE.
4.NR SPECIAL RUPEE ACCOUNT INTEREST IS TAXABLE.

return of income by NRI need to file AS FOLLOWS:

You are liable to file Return of Income only if your taxable income* in India in the relevant Financial Year (April –March) exceeds the basic exemption limit (i.e. Rs.1,10,000/- for F.Y.2007-08)

*-Non Resident Indian (NRI) earning below mentioned income shall be liable to file returns in India, irrespective of their Total Income being less than the Basic Exemption limit.

• Income from Short Term Capital Gains on equity shares or units of equity oriented mutual fund.

• Income from Long Term Capital Gains, which are chargeable to tax.

Exception:

It shall not be necessary for a Non-Resident Indian to furnish a return of income if –

a
his total income in respect of which he is assessable under this Act during the relevant financial year consisted only of investment income** or income by way of long –term capital gains **or both; and

b
the tax deductible at source has been deducted from such income.

** “investment income” means any income derived [other than dividends from Domestic Company] from a foreign exchange asset;

“Long –term capital gains” means income chargeable under the head “Capital gains” relating to capital asset, being a foreign exchange asset which is not a short - term capital asset;

“Foreign exchange asset” means any specified asset which the assessee has acquired or purchased with or subscribed to in, convertible foreign exchange;

Thus, if you don’t have any income which is chargeable to tax, you are not required to file return of income.

Also, if you have only Investment Income or Income from Long Term capital gains or both (as explained above) and the tax has also been deducted at source from such income, then you are not required to file Return of income.

However if you have short term capital gains on equity shares or units of equity oriented mutual fund (even if less than Rs.1,10,000/-i.e. the basic exemption limit )yet you are liable to file RETURN OF INCOME.

SOURCE:www.nritaxservices.com

BREAK UP OF INTERST AND PRINCIPAL ON HOME LOAN :
as regards, break up of interst and principal of the housing loan, banks do furnish same on request. or you may mail them to mail the same to your mail id.
R.V.RAO

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