What It Is?
Income Tax Act 1961 imposes a liability on the persons to pay their due taxes and file their statement of taxes by way of Income Tax return.
NON-Resident India, Foreign Entities & Multinational Companies are also duty-bound to comply with the requirements of the taxation in India.
They are also supposed to comply with all the requirements as are imposed on the Indian Citizens resident in India. Although there are additional & stringent needs to be done by them. These Transactions are complex as the transaction are happening in the two countries so one needs to understand the applicability of taxes of both countries. Here, comes the role of Double Taxation Avoidance Agreements.
What are Double Taxation Avoidance Agreements (DTAA)?
Double Taxation avoidance agreements are entered between two countries to decide and agree on where the taxation of the transaction will happen and at what rate.
Double taxation avoidance agreements define the taxability and the rates of taxes. Now, one needs to understand the pricing or the transaction value that will be
accepted by the Income Tax Authorities on which tax is to be determined. The pricing or the transaction value is to be determined in a way that is not biased. In other words, The arms Lenth price need to be determined. The arms-length price can be determined by doing the Transfer Pricing Study. This is being done to determine the unbiased price between two related entities located in two different countries.
The international tax involves the additional roles of DTAA , Transfer Pricing and the special provisions dealing with the International & NRI taxation.
Why?
Every foreign entity operating in India and the NRI doing any financial transaction is supposed to comply with the Income Tax Act like the Indian Citizens resident in India.
All foreign entities are required to get their books Audited and file their taxes in India. Nri is sometimes exempted to file their Returns but is supposed to comply with provisions. They need to know when they need to file their returns.
NRI having any investment, business and any other income thereon are suppose to comply and file their returns in India.
When any foreign entity or NRI carries on any business or earns any Income from any other source are required to comply with the provisions like the normal residents and comply with all the provisions of the Income Tax Act.
How We Are?
We are specialise in dealing with the International Transaction advisory, planning & Compliances. We provide the following services :
- Advisory to NRI for Indian Tax System
- Filing of Returns for NRI
- Advisory & Compliance for Foreign Remittances from India to NRI and Foreign Entities
- Advisory & Compliances for Inward remittances as Investment in India or otherwise.
- Advisory & Compliance for Structuring & Restructuring for making Investment in India.
- Due Diligence services for making Investment in India.
- Overall Structuring advice for running business in India.
- Transfer Pricing Study & Reporting.
- Capital Gains taxtion advisory and Remittances to NRI on inherited & owned properties.
- Virtual CFO Services to NRI.
- Advisory & compliance for Double Tax Avoidance agreements.
We are understand Your requirement and then plan your affairs accordingly for the smooth execution. We have over 30 years of experience in supporting foreigners, NRI, Foreign Entities & MNC’s.
FAQs
1. My company deducts TDS. Do I still have to file my tax return?
Yes, deducting TDS and filing a tax return are two different things. You file a tax return to show that you have paid all the taxes you needed to pay. The income tax return is also a useful document when it comes to applying for a loan or visa.
2. How do I pay tax to the government?
You can pay the tax directly on the Income Tax Department website using your Netbanking account with challan 280.
3. Can I file income tax returns for years I missed?
Yes, in any given financial year, you can file for the last two years. For e.g in FY 2016-17, you can file for both FY 2015-16 and FY 2014-15 online.
4. Is it necessary to attach any documents along with the return of income?
Taxpayers are not required to attach any documents like proof of investment, TDS certificates, for ITR return forms along with the return of income (whether filed manually or filed electronically). However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.
5. If I have paid excess tax, how will it be refunded to me?
The excess tax can be claimed as a refund by filing your Income tax return. It will be refunded and credited back into your bank account through ECS transfer. It is important to make sure no mistakes are made while mentioning bank details such as account number, IFSC code etc in the ITR form.
6. Is it necessary to file a return of income when I don’t have any positive income?
You must file your return before the due date, if you have sustained a loss in the financial year and if you want to carry forward to the subsequent year for adjustment against subsequent years positive income. Loss can be carried forward only if you have filed the return claiming such loss before the due date.
7. What is the process of ITR preparation and filing?
ncome Tax Return is a form which is used to file the income tax with the Income Tax Department.
Income tax is a tax imposed by the Central Government on income of a person.
Filing income tax is every citizen’s responsibility. The IT department verifies these declarations of income and if any amount has been paid in excess, the department refunds the amount to the assessee’s bank account. All entities are required to file the taxes on time to avoid penalty.
The form that contains information of income and tax paid of an assessee is called Income Tax Return. The Income Tax Department of India has various forms for it such as ITR 1, ITR 2, ITR 3, ITR 4S, ITR 5, ITR 6 and ITR 7.
8. Want to know more about Income Tax Return in India?
Income tax is the principal source of revenue for ministries and governments around the world. The revenue gained from the income tax filing are generally used to sponsor public duties, settle government responsibilities, and supply goods for country residents. Therefore, every revenue profiting entity or business in a country is liable to file for income tax returns without fail in order to aid the government.
9. What are the classes of Income Tax?
All incomes and profits are taxable by the government of India. However, each income source has a different taxable percentage, depending on the rate and the age of the person. For investments, taxing rates are measured based on the time period from when it was invested in.
Under the Income Tax Act 1961, there are five sources stipulated, like salary, business or profession, house property, capital gains and other sources. Income from other sources includes income from residual sources.
Let us see in depth the different types of taxes, as it is an important function to be known and understood.
10. How does Income Tax filing relate with NRIs?
NRIs also known as Non-resident Indians are entitled to settle taxes for their incomes according to the Indian tax regime for the revenue they earn during their stay in the country. Some of the criteria and procedures involved to file for income returns for NRIs and should be made familiar are as follows.
- Keep a Tab on Residential position in the country
- Declare revenue and taxes in advance
- Be Mindful of Chargeable Revenues
- Keep an Account of Tariff Obligation
- Have a Good Knowledge of Double Taxation Treaty Benefit (DTAA)
- Know the ITR Divisions
- Be Informed on Excluded Revenue Information
- Admittance of Financial Information
- Specifics to be Aware off for Valuables and Obligation in ITR
- Be Sure to Authenticate the ITR