How to File ITR in Case of Foreign Income
The last date of file Income Tax Return (ITR) for FY 2023-24 (AY 2024-25) without late fee is 31st July 2024. Taxpayers filing their return after the due date will have to pay interest under Section 234A and a penalty under Section 234F. That way Taxpayers need to gather all necessary documents before the last date.
But In the case of Foreign Income tax implications depend on your residential status and international taxation agreements like
Resident Indian- If you are a resident of India, you are liable to pay tax on your worldwide income, including income earned abroad.
Non-Resident Indian (NRI) – NRIs only pay income tax earned or accrued in India.
Who earns Foreign Income?
- Freelancer who works on UpWork, Fiverr, Freelancer Projects.
- Person who receives any foreign income by Paypal or Wire Transfer etc against any Service or Product.
- Youtubers & Bloggers who received income in Dollar from outside India
- Ecommerce, Dropshippers who got the foreign income in dollars.
TCS on Foreign Remittance?
If your foreign remittance is more than 7 lakh rupees in a year under LRS (Liberalised Remittance) Scheme Then 5% TCS is deducted by the respective bank and deposit to govt against your PAN Card. this could be refund as Back just like TDS Refund.
Tax Rate on Foreign Income?
In India on the Foreign income you need to pay taxes just at normal slab rates which is applicable for Indian Resident Person.
If you already paid taxes in a foreign country then you are eligible for tax credit under Double Tax Avoidance Agreement (DTTA) Agreement just like India USA.
How income tax returns are filed for foreign income in India are
Resident Indian:
- File an income tax return and disclose all income earned globally.
- Income earned in foreign currency needs to be converted to Indian rupees for tax calculation.
Non-Resident Indian (NRI)
- File an income tax return if your NRI income exceeds the basic exemption limit or you want to claim tax benefits or carry forward losses.
- Only report income earned or accrued in India in your return.
