In recent times, many so-called “finfluencers” and “fraudcasters” have been spreading a misleading narrative about taxation. According to them, if your taxable income exceeds ₹12,00,000—even by ₹1—you will lose the rebate and suddenly have to pay ₹62,400+ in taxes. This claim sounds alarming, but it is entirely false.

The above myths emerged immediately after the Budget 2025 without proper interpretation. The summary of personal taxes slabs as per Budget 2025 can be read by clicking here.

Thankfully, the Income Tax Act provides for Marginal Relief, ensuring that an additional ₹1 in income does not create an unfair tax burden. Let’s break this down in simple terms.

The Finfluencer & Fraudcast Myth

They claim that if your income is ₹12,00,001, your tax liability will jump to ₹62,400+. The idea of suddenly losing the rebate sounds frightening and discouraging for taxpayers. However, this is a misinterpretation of tax laws and how rebates work under the new tax regime.

The Truth: Marginal Relief Applies

Under the new tax regime, taxpayers earning up to ₹12,00,000 get a rebate under Section 87A, effectively making their tax liability zero. But what happens if your income is ₹12,00,001?

Instead of immediately paying ₹62,400+ in tax, Marginal Relief ensures that you pay only ₹1 in tax!

Yes, you read that right! If your taxable income is just ₹1 above ₹12,00,000, you will not face a sudden, steep tax burden. Instead, the tax amount is adjusted in such a way that you only pay the additional tax corresponding to the extra income.

What Is the Maximum Income for Marginal Relief?

Marginal relief is available until your income reaches approximately ₹12,73,934.

• If your taxable income is between ₹12,00,001 and ₹12,73,934, marginal relief ensures you only pay tax on the excess amount above ₹12,00,000.
• Once your income exceeds ₹12,73,934, the tax liability surpasses the additional income over ₹12,00,000, and marginal relief no longer applies.

Key Takeaways

✅ Marginal Relief exists to prevent unfair tax jumps.
✅ If your taxable income is between ₹12,00,001 and ₹12,73,934, tax is adjusted fairly.
✅ You do NOT suddenly lose all benefits or pay ₹62,400+ in tax for earning ₹1 more.
✅ Don’t believe misleading financial myths—always check official tax laws!

Frequently Asked Questions (FAQs)

1. What is Marginal Relief?

Marginal Relief is a provision in the Income Tax Act that ensures taxpayers do not face a sudden jump in tax liability when their taxable income slightly exceeds ₹12,00,000 under the new tax regime.

2. How does Marginal Relief work?

If your taxable income exceeds ₹12,00,000 by a small margin, Marginal Relief ensures that you only pay tax on the excess amount instead of facing a sudden, steep tax liability.

3. Does Marginal Relief apply to all taxpayers?

Marginal Relief applies to taxpayers under the new tax regime whose taxable income is between ₹12,00,001 and ₹12,73,934.

4. What happens if my income exceeds ₹12,73,934?

If your taxable income crosses ₹12,73,934, your tax liability exceeds the additional income over ₹12,00,000, and Marginal Relief no longer applies.

5. Is it true that earning ₹1 more than ₹12,00,000 leads to ₹62,400+ in taxes?

No, this is a myth. Marginal Relief prevents such an unfair tax burden. If your income is ₹12,00,001, your actual tax liability is just ₹1, not ₹62,400+.

6. How can I ensure I am calculating my tax correctly?

It is always best to consult a qualified Chartered Accountant (CA) to understand your tax liability and Marginal Relief calculations accurately.

7. Where can I get more reliable tax information?

Always refer to official government resources or consult a professional CA instead of relying on misinformation spread by unverified sources online.

Final Thoughts

The idea that a ₹1 increase in taxable income can create a huge tax burden is a misconception spread by those who don’t understand taxation properly. Marginal relief is a critical feature in our tax system that ensures fairness and prevents sudden financial shocks. So, the next time someone tells you that earning slightly more will lead to a massive tax jump, you’ll know the truth!

For professional tax guidance, always consult a qualified Chartered Accountant (CA) instead of relying on misleading online advice!

The Finance Bill, 2025, has introduced changes in personal income tax rates for the Assessment Year (AY) 2026-27. This article provides a detailed overview of the tax slabs under both the new tax regime (default) and the old tax regime (optional) while comparing tax liabilities at different income levels.

Personal Income Tax Rates for AY 2026-27

New Tax Regime (Default) – Section 115BAC

• Health & Education Cess: 4% applies to the total tax liability.
• Surcharge: Additional tax for income exceeding ₹50 lakh.
• No deductions or exemptions allowed.

Old Tax Regime (Optional) – No Change in Rates

• Rebate under Section 87A: Available for income up to ₹5 lakh (maximum rebate ₹12,500).
• Allows deductions under 80C, 80D, HRA, LTA, etc.

Comparison of Tax Liability under Both Regimes

To understand the impact of these tax rates, let’s compare tax liability for incomes of ₹20 lakh, ₹30 lakh, and ₹40 lakh under both regimes.

Tax Calculation for Different Income Levels

Tax Breakdown for ₹20,00,000

✅ New Regime:

• Tax on first ₹4,00,000 – Nil
• ₹4,00,001 – ₹8,00,000 @ 5% = ₹20,000
• ₹8,00,001 – ₹12,00,000 @ 10% = ₹40,000
• ₹12,00,001 – ₹16,00,000 @ 15% = ₹60,000
• ₹16,00,001 – ₹20,00,000 @ 20% = ₹80,000
• Total Tax = ₹2,00,000 + 4% Cess (₹8,000) = ₹2,08,000

✅ Old Regime (After ₹2L Deductions – Net Income ₹18,00,000):

• ₹2.5L – ₹5L @ 5% = ₹12,500
• ₹5L – ₹10L @ 20% = ₹1,00,000
• ₹10L – ₹18L @ 30% = ₹2,40,000
• Total Tax = ₹3,52,500 + 4% Cess (₹14,100) = ₹3,66,600

Disclaimer:

This article is for informational purposes only and should not be considered as professional tax advice. While every effort has been made to ensure accuracy, tax laws are subject to change, and individual circumstances may vary. Readers are advised to consult with a qualified Chartered Accountant or tax professional before making any tax-related decisions. The author and publisher disclaim any liability for any decisions made based on the content of this article.

Introduction

Tax Deducted at Source (TDS) on rent paid to a Non-Resident Indian (NRI) landlord is governed by Section 195 of the Income Tax Act, 1961. If you are paying rent to an NRI landlord, it is essential to comply with TDS deduction regulations to avoid penalties. This article explains the applicable TDS rate, lower TDS deduction process, Form 15CA & 15CB requirements, determination of NRI status, impact of DTAA, Budget 2017 amendments, and consequences of non-compliance, with an example for clarity.

How to Determine Whether a Landlord is an NRI

Before deducting TDS, the tenant must verify if the landlord qualifies as an NRI under the Income Tax Act, 1961. A landlord is considered an NRI if:

1. Stay in India: The landlord stays in India for less than 182 days in the relevant financial year.
2. Past Stay Record: If the landlord was in India for less than 365 days in the preceding four years and less than 60 days in the current financial year, they are considered an NRI.
3. Self-Declaration: In some cases, the landlord can provide a self-declaration (Along with CA Certificate) stating their residential status, which the tenant can verify with relevant documents (passport, visa, or foreign address proof).

If the landlord is an NRI, the tenant must deduct TDS under Section 195, rather than Section 194I applicable to resident landlords.

TDS Rate on Rent Paid to NRI

As per Section 195, the applicable TDS rate on rent paid to an NRI is 30% (plus applicable surcharge & cess) on the gross rent amount. Unlike resident landlords, where TDS is deducted at 10% under Section 194I, rent paid to an NRI is subject to a higher rate.

Impact of DTAA (Double Taxation Avoidance Agreement)

If the NRI landlord resides in a country that has a DTAA (Double Taxation Avoidance Agreement) with India, they may be eligible for a lower TDS rate. The landlord can claim DTAA benefits by:

1. Providing a Tax Residency Certificate (TRC) from their country of residence.
2. Furnishing Form 10F and a self-declaration stating they are eligible for DTAA benefits.
3. Ensuring compliance with Section 90/90A of the Income Tax Act for DTAA applicability.

For example, under DTAA with the USA, the TDS rate may be reduced to 15% instead of 30%, depending on the agreement terms.

Example of TDS on Rent to NRI

Assume Mr. Sharma, an Indian resident, is paying a monthly rent of ₹1,00,000 to his NRI landlord.

• TDS Calculation: ₹1,00,000 × 30% = ₹30,000
• Monthly payment after TDS deduction: ₹1,00,000 – ₹30,000 = ₹70,000
• The deducted TDS of ₹30,000 must be deposited with the Income Tax Department.

If DTAA applies and the TDS rate is 15%, then:

• TDS Calculation: ₹1,00,000 × 15% = ₹15,000
• Monthly payment after TDS deduction: ₹1,00,000 – ₹15,000 = ₹85,000

Lower TDS Deduction Process

If the NRI landlord’s actual tax liability is lower than the 30% TDS rate, they can apply for a Lower Deduction Certificate (LDC) from the Income Tax Department. Here’s how:

1. Application by NRI Landlord: The landlord must apply for a lower deduction certificate (Form 13) from the Assessing Officer (AO).
2. Certificate Issuance: The AO reviews the landlord’s tax liabilities and issues the certificate specifying a reduced TDS rate.
3. Tenant’s Compliance: The tenant can deduct TDS at the lower rate mentioned in the certificate.

Form 15CA & 15CB Requirements

For any payment made to an NRI, compliance with Form 15CA & 15CB is mandatory before remittance:

1. Form 15CA: A declaration by the payer (tenant) to be submitted online before making the remittance to an NRI landlord.
2. Form 15CB: A certificate issued by a Chartered Accountant (CA) certifying that the tax deduction is in compliance with the Income Tax Act.
3. Submission: If the remittance exceeds ₹5,00,000 in a financial year, both Form 15CA & 15CB are required. Otherwise, only Form 15CA is sufficient for smaller amounts.

Budget 2017 Amendment Impact

Budget 2017 introduced stringent compliance measures for TDS on payments made to NRIs, emphasizing stricter enforcement of Form 15CA & 15CB. The following changes were made:

1. Expanded scope of TDS deduction: TDS compliance for rental payments to NRIs is closely monitored, making it necessary for tenants to deduct and deposit TDS accurately.
2. Strengthened penalties: Non-deduction or non-payment of TDS now attracts higher interest rates and penalties.

Consequences of Not Deducting TDS on NRI Rent

Failure to deduct or deposit TDS can lead to serious tax implications, including:

• Interest on Late Deduction/Deposit:
  • 1% per month for failure to deduct TDS.
  • 1.5% per month for failure to deposit TDS after deduction.
• Penalty Under Section 271C: The tenant may be liable to pay an equivalent amount as a penalty.
• Disallowance of Rent Expense: If TDS is not deducted, the rent paid may be disallowed as a business expense for tax purposes.
• Tenant in Default: If the tenant fails to deduct and deposit TDS, they will be considered a “defaulter” and held liable for the unpaid tax amount, along with penalties and interest.

Conclusion

Compliance with TDS on rent paid to NRI landlords is crucial to avoid penalties and legal issues. If you are unsure about tax deductions or need assistance with a lower TDS application, consult N C Agrawal& Associates, CA in Delhi and Noida to ensure seamless compliance.

You can also read our Article on TDS applicabilty on sale of property by NRI by clicking here

For expert advice, reach out to N C Agrawal & Associates, offering specialized tax and compliance services for residents and NRIs.

During various search & seizure and survey operations conducted by Income Tax Department, it has come to notice that various individuals are claiming incorrect deductions, under sections 80C, 80D, 80E, 80G, 80GGB, 80GGC, in their ITRs, leading to reduction of tax payable to the government.

As many as 90,000 salaried individuals, both from PSUs and the private sector, have withdrawn wrongful tax deductions claims totalling Rs 1,070 crore as of December 31, 2024, government sources said on Thursday.

During various search & seizure and survey operations conducted by Income Tax Department, it has come to notice that various individuals are claiming incorrect deductions, under sections 80C, 80D, 80E, 80G, 80GGB, 80GGC, in their ITRs, leading to reduction of tax payable to the government.

During investigation, it was revealed that such individuals are employees of organisations operating in diverse fields including PSUs, big corporations, MNCs, LLPs, Private Ltd Companies, etc, sources said. Also, most of them who claimed wrongful deductions were working in the same company.

Analysis of the information with the department showed that there is a vast mismatch between total deductions under section 80GGB/80GGC claimed by taxpayers in their ITRs as against the total receipts shown by the donees in their ITRs.

Similarly, deductions claimed under sections 80C, 80E, 80G also appear to be suspicious in nature, sources said. They said, a list of common employers (TDS deductors) has been identified and tax department would be reaching out to as many persons as possible who are suspected to have claimed bogus deductions under section 80E, 80G, 80GGA, 80GGC and other deductions

Further, verification has revealed that certain unscrupulous elements have misguided taxpayers for claim of incorrect deduction/refunds,” a source said. Sources said the department has been conducting outreach programmes with employers to spread awareness about the consequences of claiming incorrect deductions in the ITRs and corrective measures which can be taken by the taxpayers to rectify the errors of omission or commission.

Till 31st December, 2024, approximately 90,000 taxpayers have withdrawn incorrect claim of deductions amounting to Rs 1,070 crore approx in their ITRs and have paid additional taxes,” a source said.

As per the provisions of Income-tax Act, 1961, taxpayers can file updated returns on payment of some additional tax rectifying the errors within two years from the end of the relevant assessment year, for AY 2022-23 to 2024-25. In order to intensify the efforts of the department of promoting voluntary tax compliance and reducing litigation, outreach programme with employers is being launched, sources added. PTI JD CS ANU

Source: https://www.moneycontrol.com/news/india/90k-salaried-individuals-withdraw-rs-1-070-crore-worth-wrongful-tax-deduction-claims-12912663.html

The upcoming Direct Tax Code (DTC) 2025 in India is designed to replace the existing Income Tax Act of 1961, aiming to modernize, simplify, and enhance the efficiency of the tax system. Key features include:

1. Residency Simplification: The DTC will reduce residency categories from three (Resident and Ordinarily Resident, Resident but Not Ordinarily Resident, and Non-Resident) to two: Resident and Non-Resident.
2. Unified Financial Year Basis: The concepts of Previous Year and Assessment Year will be removed, with the Financial Year becoming the sole reference point for tax purposes.
3. Integration of Capital Gains: Capital gains may be taxed as regular income, which could increase tax rates for some taxpayers.
4. Updated Income Terminology: “Income from Salary” will be renamed as “Employment Income,” and “Income from Other Sources” will become “Income from Residuary Sources,” though the main income categories remain unchanged.
5. Expanded Audit Eligibility: In addition to Chartered Accountants (CA), Company Secretaries (CS) and Cost and Management Accountants (CMA) may also be authorized to conduct tax audits, enhancing accessibility and competition in tax audit services.
6. Streamlined Sections and Schedules: Fewer sections in the tax code aim to simplify compliance and reduce litigation complexity.
7. Revised TDS and TCS Rules: Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will apply more broadly across income types, with lower rates but wider applicability.
8. Reduction in Exemptions: Many existing exemptions and deductions are likely to be phased out, broadening the tax base and simplifying filing processes. The goal is to increase the taxpayer base from about 1% to around 7.5% of the population.
9. Corporate Tax Rate Harmonization: A unified tax rate for domestic and foreign companies aims to encourage foreign investment by creating a level playing field.
10. Lowered Tax Burden for Salaried Employees: Salaried employees may see a reduced tax burden, addressing the long-standing issue of a disproportionate tax load on this group.

The DTC 2025 is anticipated to take effect in the fiscal year 2025-26, signaling a major evolution in India’s tax framework that could impact compliance, competitiveness, and transparency across sectors.

TDS Rate for Purchase of Property from NRI Seller

When purchasing property from a Non Resident Indian seller, the buyer is generally required to deduct TDS at rates different from those applicable to resident sellers. If the property is a long term capital asset, the applicable rate is usually 12.5 percent plus surcharge and cess. If the property results in short term capital gains, the rate may go up to 30 percent plus surcharge and cess. The actual impact depends on facts, holding period, and tax treatment.

Basic Procedure for Deducting TDS

What is Lower TDS Certificate under Section 197

An NRI seller can apply for a lower or nil deduction certificate under Section 197 when the actual tax liability is likely to be lower than the standard rate at which the buyer would otherwise deduct tax. The application is made in Form 13 and examined by the Income Tax Department based on facts, documents, estimated tax liability, and past compliance.

When Should an NRI Consider Applying

• Actual tax liability is lower than standard TDS
• Property is a long term capital asset and computation needs review
• Property was purchased long ago and cost records support lower gain
• Eligible deductions or losses may reduce final liability
• DTAA benefit may be relevant in the case
• Transaction value is large and cash flow matters

  For USA-based NRIs:

  If you are living in USA and selling property in India, your tax planning should also consider US taxation, DTAA, and foreign tax credit. You can read our detailed page on income tax for Indians in USA to avoid double taxation and compliance issues.

Practical Example 1 NRI Property Sale

Practical Example 2 NRO Interest

A similar issue arises in NRO interest cases. Banks may deduct tax at higher rates, while the actual tax payable may be significantly lower after considering deductions, slab impact, or treaty relief. In such cases too, lower deduction planning can reduce annual refund dependency.

How to Apply for Lower TDS Certificate

Validity of Lower TDS Certificate

• Usually valid for a specific financial year
• Applicable only for specified payer and income
• Fresh application may be needed for future years or fresh transactions

What Happens After the Certificate is Issued

• Certificate copy is shared with buyer, bank, or payer
• TDS is deducted as per approved rate
• Excess deduction risk reduces
• Refund dependency comes down sharply

Is ITR Filing Still Required

Yes. Lower TDS certificate does not replace return filing. The seller still needs to file the appropriate income tax return to report income, confirm final tax liability, and complete tax compliance.

FAQs on Lower TDS Certificate for NRI

Is lower TDS certificate guaranteed
No. Approval depends on facts, documentation, and tax position.

How long does approval usually take
It can take a few weeks depending on the complexity and jurisdiction.

Can buyer ignore a valid certificate
Buyer should follow the valid certificate issued by the department for the covered transaction.

Can NRI apply while staying outside India
Yes, many cases can be handled online with proper documentation.

Can DTAA relief matter in Section 197 application
Yes, depending on the facts of the case.

In India, the Income Tax Act governs the taxation of individuals based on their income, providing two distinct tax regimes: the Old Tax Regime and the New Tax Regime. Each regime offers unique advantages and considerations, impacting how taxpayers calculate their taxable income and their overall tax liability. This article explores the differences between the Old Tax Regime and New Tax Regime for the financial year 2023-24, emphasizing their tax structures, benefits, and the specific advantage provided by Section 87A.

Understanding the Old Tax Regime

The Old Tax Regime, also known as the existing tax structure, has been in place for many years. It allows taxpayers to avail various deductions and exemptions under different sections of the Income Tax Act. These deductions are crucial as they reduce the taxable income, thereby lowering the overall tax liability. Key deductions available under the Old Tax Regime include:

• Section 80C: Deductions for investments in instruments such as Employee Provident Fund (EPF), Public Provident Fund (PPF), Life Insurance Premiums, Equity Linked Savings Scheme (ELSS), etc., up to ₹1.5 lakh per annum.
• Section 80D: Deductions for health insurance premiums paid for self, family, and parents, up to specified limits.
• Section 24: Deductions for interest paid on housing loans, up to specified limits.
• HRA (House Rent Allowance): Exemption available for rent paid if HRA forms part of salary.

These deductions significantly impact the taxable income, allowing taxpayers to potentially reduce their tax outgo substantially. The tax rates under the Old Tax Regime for individuals below 60 years for FY 2023-24 are structured as follows:

Senior citizens (60 years and above but below 80 years) and super senior citizens (80 years and above) have different slabs and rates tailored to their age brackets.

Introduction of the New Tax Regime

The New Tax Regime was introduced from FY 2020-21 onwards to simplify the tax structure by eliminating most deductions and exemptions. This regime offers a lower number of tax slabs but with slightly different rates compared to the Old Tax Regime. The idea behind the New Tax Regime is to provide a straightforward tax calculation process without the need for detailed tax planning around deductions. The tax rates under the New Tax Regime for FY 2023-24 are structured as follows:

Key Differences Between the Old Tax Regime and New Tax Regime

1. Tax Structure:

• Old Tax Regime: Offers multiple tax slabs with higher rates applicable to higher income brackets. Taxpayers can reduce their taxable income significantly by availing deductions under various sections like 80C, 80D, etc.
• New Tax Regime: Provides a simpler tax structure with fewer slabs but slightly different rates. The regime does not allow most deductions and exemptions, aiming for a more straightforward tax calculation process.

2. Deductions and Exemptions:

• Old Tax Regime: Allows taxpayers to claim deductions under sections such as 80C, 80D, 24, etc., which reduce taxable income and subsequently reduce the tax liability.
• New Tax Regime: Does not allow most deductions and exemptions except those specified by the government. Tax calculation is based on gross income without adjustments for deductions.

3. Impact on Tax Liability:

• Old Tax Regime: Often results in a lower tax liability for taxpayers who can utilize deductions effectively to reduce their taxable income.
• New Tax Regime: May lead to higher tax liability compared to the Old Tax Regime, especially for those who would otherwise benefit from deductions under the old structure.

4. Section 87A Benefit:

Under both the Old and New Tax Regimes, individuals with total income up to ₹5,00,000 are eligible for a rebate under Section 87A. This rebate directly reduces the tax liability after calculating taxes:

• Rebate Amount: The rebate is the lower of 100% of the income tax liability or ₹12,500.
• Applicability: The rebate is available to resident individuals (below 60 years) whose total income does not exceed ₹5,00,000. It effectively reduces the tax burden for eligible taxpayers, making the regime more favorable, especially for lower income groups.

Example Scenario: Impact of Section 87A Benefit

Let’s consider an example where an individual’s total income after deductions under the Old Tax Regime is ₹4,80,000:

• Tax Calculation without Rebate:
• Income up to ₹2,50,000: Nil tax
• Income from ₹2,50,001 to ₹4,80,000: Tax at 5% on ₹2,30,000 (₹4,80,000 – ₹2,50,000) = ₹11,500
• Total Tax Liability = ₹11,500
• Tax Calculation with Section 87A Rebate:
• After applying the rebate of ₹11,500 (lower of 100% of tax liability or ₹12,500), the tax payable is reduced to Nil.

Conclusion

Understanding the differences between the Old Tax Regime and New Tax Regime for FY 2023-24, including the benefit of Section 87A, is crucial for taxpayers to make informed decisions about their tax planning strategies. Each regime offers unique benefits and considerations, catering to different taxpayer profiles and financial situations. Whether to opt for the Old Tax Regime with its deductions and exemptions or the New Tax Regime for its simplicity and fixed tax structure depends on individual circumstances and tax planning goals. By evaluating these factors carefully, taxpayers can optimize their tax liabilities while ensuring compliance with tax laws effectively. The inclusion of Section 87A ensures that eligible taxpayers receive additional relief, further influencing tax planning decisions.

1. NRI Meaning:

• Non-Resident Indian (NRI) refers to an Indian citizen or a person of Indian origin who resides outside India for employment, business, or any other purpose indicating an indefinite stay abroad.

2. NRI Status Calculation Process:

• NRI status is determined based on the individual’s physical presence in India during a financial year (April 1 to March 31).
• If an individual stays in India for less than 182 days in a financial year, they are considered an NRI for that year subject to meet out other conditions of status determination

3. Income Tax Applicable to NRIs:

• NRIs are taxed on income earned or accrued in India, such as income from property, capital gains, interest, dividends, etc.
• Income earned outside India is generally not taxable in India for NRIs.
• The tax rates applicable to NRIs are the same as those for residents of India.

4. Interest in NRE and NRO Accounts:

• NRE (Non-Resident External) accounts: Funds in NRE accounts are freely repatriable (can be transferred abroad) and are exempt from Indian taxes, including interest earned.
• NRO (Non-Resident Ordinary) accounts: Funds in NRO accounts are not freely repatriable, and the interest earned is subject to Indian taxes.

5. Double Taxation Avoidance Agreements (DTAA):

• DTAA aims to prevent double taxation of income in two countries.
• NRIs can benefit from DTAA provisions by claiming tax credits or exemptions in one country for taxes paid in the other country.

6. High-Value Transactions to be Kept in Mind by NRIs:

High-value transactions for NRIs can include various activities or financial transactions that involve significant sums of money or assets. Here are some examples of high-value transactions that NRIs should be mindful of:

Property Transactions:

• Purchase or sale of real estate: NRIs investing in or disposing of property in India should be aware of the high value associated with real estate transactions. This includes buying, selling, or gifting property.
• Rental income: NRIs earning rental income from properties in India should keep track of the high-value transactions associated with rental payments, lease agreements, etc.

Investments:

• Stock Market Investments: NRIs investing in the Indian stock market may engage in high-value transactions through buying or selling shares, mutual funds, or other securities.
• Fixed Deposits and Financial Instruments: Investments in fixed deposits, bonds, debentures, and other financial instruments may involve significant sums of money.

Banking and Remittances:

• Transfer of Funds: NRIs transferring large sums of money to or from India for investment, business, or personal purposes should be aware of the high-value nature of these transactions.
• Foreign Currency Accounts: Opening or closing foreign currency accounts, especially NRE and NRO accounts, involves high-value transactions that NRIs should monitor.

Loans and Borrowings:

• Loans and Mortgages: NRIs obtaining loans or mortgages from Indian banks or financial institutions for property purchase or other purposes may involve high-value transactions.
• Repayment of Loans: NRIs repaying loans or mortgages to Indian lenders also constitutes high-value transactions.

Business Transactions:

• Setting up Business Entities: NRIs establishing businesses or investing in Indian companies may engage in high-value transactions related to company formation, capital infusion, etc.
• Commercial Contracts: Business agreements, contracts, and transactions involving significant monetary values should be carefully documented and monitored.

Tax Payments and Compliance

• Payment of Taxes: NRIs fulfilling their tax obligations in India, including payment of income tax, property tax, or other levies, may involve high-value transactions.
• Compliance Reporting: Meeting reporting requirements for high-value transactions, such as filing tax returns, disclosing foreign assets, and complying with regulatory norms, is essential for NRIs.

7. Tax Filing for NRIs:

• NRIs are required to file income tax returns in India if their total income exceeds the basic exemption limit.
• Even if income is below the taxable threshold, filing a return may be necessary to claim a refund of taxes withheld at source or if certain types of income (like capital gains) are involved.
• Timely filing of tax returns and compliance with reporting requirements are crucial for NRIs to fulfill their tax obligations in India.

For personalized advice and assistance with tax matters, NRIs should consult with qualified tax professionals or chartered accountants familiar with Indian tax laws and regulations pertaining to NRIs.