For NRIs, taxation is a financial matter they constantly have to deal with. They have to pay taxes in the country in which they are presently working, and if they have a source of income in India, they have to pay taxes here as well. Knowing how to fill 15G form online can play an important role for you if you are an NRI.
If you have made fixed deposits in India, and your interest income does not exceed the limit of Rs 40,000, then it is not taxable. If your interest income exceeds Rs 40,000, but your taxable income is less than Rs 5 Lakh in a year, then you can claim a rebate on the same.
Banks deduct TDS (Tax Deducted at Source) on your FD interest first and then hand over the remaining amount to you. If your income does not fall under the taxable income slab, then you can use a 15G form to prevent TDS deduction on your interest income.
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Tax Saving Alternatives for NRIs
Knowing how to fill 15G Form can help you save income tax on your interest income, but there are a few other ways in which you can do the same.
Utilize Deductions
NRIs do not get the same privileges as residents of India do when it comes to deductions. For instance, NRIs cannot make a claim for deduction by making investments in social schemes like National Savings Certificates and Public Provident Funds. Even for medical expenses, you cannot claim tax deductions as an NRI. But there are options like the National Pension System (NPS) where NRIs can make a claim for tax deductions.
Therefore, you should utilize all these schemes where you can get tax deductions. A deduction of Rs 1.5 Lakh can be claimed by investing in NPS. An additional Rs 50,000 deduction can be availed if you exhaust the limit of Rs 1.5 Lakh by investing in other NRI eligible tax deductions sources.
Income from Property and Home Loan
Another valuable source that allows an NRI to claim tax deductions is having an income from their properties. If you make an income through rent or pay property taxes, you can claim deductions for it. Moreover, taking home loans also falls under the category of tax deductions for NRIs. So investing in Indian properties will not be a bad idea for NRIs.
A home loan gives you the eligibility to claim tax deductions on it.
Proper NRI Status
As an NRI, you do not have to pay taxes on your income in the country you are living in. But this is only maintained when your NRI status is well-maintained. If a situation arises where your NRI status is not clear, then there are chances that it can make a direct impact on your taxes. Due to unclear NRI status, taxations might be levied on your foreign income as well. To be on the safe side, click here to save taxes.
Apply For Your PAN Card
A Permanent Account Number card or PAN card helps the taxation authorities to determine whether you are eligible for paying taxes or not. It also prevents the risk of fraud. If you do not possess a PAN card, there are chances that you might pay taxes that are higher than your actual amount. So, if you are not going for the option of knowing how to fill a 15G Form, then you should definitely keep in mind that you already have your own PAN card.
How to Fill 15G Form?
If 15G is still your preferred method, then by knowing how to fill 15G Form, you can easily submit it to your bank and prevent your interest income from being taxed. As an NRI, you can submit the 15G Form online. While filling the form, here are a few things you should keep in mind.
- There will be a section in the Form where you will be asked whether you were assessed for tax under the provision of the Income Tax Act, 1961. If your income in any of the past six years was above the taxation threshold, then you have to write ‘Yes’, otherwise ‘No’.
- In the income section, give a total of all your income from different sources to show whether your TDS should be deducted from it or not. The aggregated income should be from the last year.
- The income for which you are filing the 15G Form should also be mentioned.
There are certain factors that make you eligible for a 15G Form.
- Your age should be less than 60 years. For people above the age of 60, there is a 15H Form that is more or less the same as the 15G Form.
- Your taxation liability should be nil.
- Your total interest income should be less than Rs 2.5 Lakh. And if it is above Rs 2.5 Lakh but below Rs 5 Lakh, then you can claim the rebate.
Thus, for NRIs, there are two options available: either they can learn about the alternatives through which they can claim tax deductions or learn how to fill 15G Form to avoid TDS on their interest income.
