ITR Filing on Foreign Income

Are you an Indian resident with foreign income or income from foreign stock options? If yes, you must pay taxes on such income in India. At FistFiling, our team of Chartered Accountants can help file your income tax return on foreign income at your convenience. Get expert assistance in your tax filings today!

Documents Required

Bank statement if interest received is above Rs. 10,000/

Form 16 from your company

Form 26AS Tax Credit Statement

TIS

FirstFiling - Resident with Foreign Income

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4 Easy Steps to File Your ITR on Foreign Income

1. Sign up & Purchase

Sign up and purchase the relevant plan by filling out the form above.

2. Share your details

Provide all the required information and relevant documents, as mentioned above.

3. Consult

Consult with our experts to get answers to all your queries related to tax on your foreign income.

4. ITR Filing

Our Chartered Accountants will file your ITR as per the details you share.

ITR Filing on Foreign Income

Pricing Plans

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₹4999/-

  • Tax filing for Individuals with single or multiple Form 16
  • Assistance related to DTAA (Double taxation avoidance agreement)
  • Tax Due/Refund Status and Filing Confirmation
  • CA Assisted Tax Filing
  • Computation of Indian income and tax liabilities thereon for NRI
  • Filing of FORM 67 for Salary Income, if needed 
  • Calculation of Capital gains on the sale of ESOPs and RSU
  • Declaration of Foreign Assets and Income for Indian Residents
  • WhatsApp Call / E-Mail Support
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Filed your ITR? Here’s what you need to do now…

Steps for Verify E-Filing

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See if their any notification for you regarding ITR or Doucments verification

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Once your filing is complete, you can track the filing status.

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Benefits of ITR Filing

Why File Your Income Tax Return?

File ITR Now

If you've paid a higher income tax than your actual tax liability, you should file income tax returns to claim a refund. After verification, you’ll get the refund directly into your bank account!

Applying for a Visa to visit a foreign country? You'll most likely have to submit your ITR so the embassy can analyse your income and tax status.

Your income stability is critical for the lenders. This is why you’ll have to submit your ITRs of at least 3 consecutive years when applying for loans.

You should file your income tax returns every year before the due date to avoid any penalties or other severe consequences.

Don't Know Which ITR to File

Types of Income Tax Return Form

The total income of an individual must not exceed Rs.50 lakh. His/her source of income must be:

Salary

One Hopuse Property

Other Sources Of Income, I.E., Interest Income, Dividends, Etc.g

Agricultural Income Up To Rs.5,000 Only.

Individual Must Be Ordinarily Resident In India.

A salaried individual can file his/her tax return using the ITR-2 form if:

Has A Total Annual Income Of More Than Rs. 50 Lakh.

Is A Director Of A Corporation.

Owns Unlisted Equity Shares.

Is Owning Assets Outside Of India Considered Income From Salary, Multiple Homes, Capital Gains, And Other Kinds Of Revenue.

Is A Member Of The Hindu Undivided Family (HUF).

A Resident Or A Non-Resident (Both Ordinarily Or Not Ordinarily).

by an individual or a Hindu Undivided Family having income from the following sources are eligible to file ITR-3:

Pursuing A Profession Or Business.

Invested In Unlisted Equity Shares During The Fiscal Year.

An Individual Director Of A Firm.

The Return Could Include Earnings From Rental Property, Salaries, Pensions, And Other Sources Of Income.

Income Earned As A Partner In The Company.

Individuals, HUFs, and partnership firms having the following total annual income are required to file Form ITR 4:

Business Income As Per Section 44AD Or Section 44AE.

Earnings From A Profession As Determined Under Section 44ADA.

Having A Salary Or Pension That Is Up To Rs. 50 Lakh.

Income From A Single Residential Property Earning Up To Rs. 50 Lakh (Including The Brought Forward Loss Or Loss To Be Carried Forward Cases Under This Head).

Up To Rs. 50 Lakh In Income From Other Sources (Including Winning From The Lottery And Income From Horse Races).

Know more about

Taxation on Foreign Income

When are you Considered as an Indian Resident?

If you spend more than 182 days in India during a financial year, then you will be considered a resident of India for tax purposes. This means that your global income will be subject to taxation in India.

Additionally, if you spend at least 60 days in India during a financial year and at least 365 days in the preceding four years, you will also be considered a resident of India for tax purposes. It's important to keep this in mind because it means that you need to properly report all of your income, even if it is earned outside of India.

It's worth noting that being considered a resident for tax purposes is not necessarily the same as being a citizen of India. Even if you are not an Indian citizen, you may still be considered a resident of India for tax purposes if you meet the criteria outlined above.

Is your income Taxable?

As a resident individual in India with global income, you are required by law to pay taxes on all of your income, whether it was earned within the country or received from outside of it. The Income Tax Act of 1961 makes it mandatory for you to declare your foreign income and pay taxes on it at the applicable slab rate, after taking into consideration certain deductions and exemptions that are available to you.

It's worth noting that in certain circumstances, your foreign income may be taxed at a different rate, or even exempt from taxation altogether. However, it is important that you declare all of your income and pay taxes on any income that is taxable in India. Failing to do so could result in hefty fines and legal consequences.

More Information

Tax Implications on Foreign Income

If you are a resident of India and you have a foreign asset or an investment overseas that generates income, you must pay taxes on that income in India according to your applicable income tax slab rates. Here is a step-by-step procedure to help you include your foreign income in your tax returns and pay the taxes due on it.

You should start by converting your worldwide income into Indian currency using the exchange rate on the last day of the relevant tax year.

When you convert your foreign income into Indian Rupees, it is important to categorize it correctly under the relevant head of income. If you earned the income from a property situated in a foreign country, you should list it under the 'Income from house property' category. However, if you earned the income by providing services abroad, you should include it under the 'Income from salary' category. It is essential to select the appropriate head of income based on the type of foreign income you received and list it accordingly.

After you have listed your foreign income, it will be considered as a component of your total income earned in India. Then, you need to add up all the incomes from various heads of income to calculate your gross taxable income.

You can apply deductions and exemptions permitted under different sections of the Income Tax Act to the gross taxable income you calculated. This will give you the net taxable income.

To calculate your tax liability, you need to determine your net taxable income and then apply the relevant income tax slabs. Once you've calculated the amount due, you must pay the taxes accordingly.

Claim Tax Credit On Foreign Income

The steps for claiming a foreign tax credit under Double Tax Avoidance Agreement (DTAA):

Determine your eligibility based on your residency status and the terms of the agreement between your country and the one where you paid taxes.

Examine the nature of your income to confirm if it falls under the scope of DTAA.

Review the provisions of DTAA related to double taxation relief, foreign tax credit availability, and claiming rules.

Check if there is a maximum limit on the amount of foreign tax credit that you can claim under the applicable DTAA.

Verify whether the taxes you paid are covered by the DTAA.

Explore the methods for claiming treaty benefits or relief from double taxation, such as the credit method or the exemption method.

Submit the necessary documentation to support your claims for the foreign tax credit, such as proof of tax payment and other relevant papers.

Note the filing deadlines specified in the DTAA and make sure that you comply with them.

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Frequently Asked Questions

major documents are: Bank Statement, Form 16 - Form 26A, TIS, Annual Income and Details of any income earned in India

The number of days you spend in India determines your income tax residency status. So, If you’re a foreign national living in India, you may be considered an Indian citizen for tax purposes. You are usually considered a resident for taxation purposes if you spend 182 days or more in India during a fiscal year. If you are considered a resident Indian under income tax rules, any income you earn anywhere in the world is taxable in India.

You need to fill and submit Form 67 to claim relief from the foreign tax credit. You must enter accurate and complete details of your foreign income to benefit from the foreign tax credit.

Foreign Tax Credit applies to all Indian residents with a source of income that accrues in a foreign country. If you’re earning any income outside India, then it is taxable both in the country where it is accrued and in India. The government has provided the benefit of FTC to avoid double taxation, under which you can claim a deduction on the tax paid.

Rule 128 of the Income Tax Rules states that if you are an Indian resident who pays tax outside the Indian territory for any income you’ve earned outside India, then you can receive a credit for such tax paid in the resident country.

As per the Income Tax Act of 1961, any income you earn up to INR 2,50,000 is exempt from income tax. The foreign income is treated as domestic income and tax is levied as per the applicable slab rates.

If there is no DTAA between the two countries, you can claim relief under Section 91 of the Income Tax Act. And, if there is a DTAA between the two countries, you can claim relief under Section 90.

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