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May 27, 2021

Are NRI required to declare their Assets and Liabilities held in India in Income Tax Return?

by Mahesh Mara in Income Tax

Are NRI required to declare their Assets and Liabilities held in India in Income Tax Return?

Non-resident Indian’ is an individual who is a citizen of India or a person of Indian origin and who is not a resident of India. Thus, in order to determine whether an Individual is a non-resident Indian or not, his residential status is required to be determined under Section 6. In this article we will discuss whether NRI are required to disclose their Assets and Liabilities held in India in Income Tax Return.

What is section 6 of the Income Tax Act?

As per section 6 of the Income-tax Act, an individual is said to be non-resident in India if he is not a resident in India and an individual is deemed to be resident in India in any previous year if he satisfies any of the following conditions:

1. If he is in India for a period of 182 days or more during the previous year;

or

2. If he is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.

However, condition No. 2 does not apply where an individual being citizen of India or a person of Indian origin, who being outside India, comes on a visit to India during the previous year.

When does Non Resident are required to disclose their asset details?

Those assesses including salaried employees (i.e., Residents or Resident Not Ordinary Residents or Non-Residents) whose total income (after all deductions) in India exceeds Rs.50 Lakhs have to mandatorily disclose the details of movable and immovable assets held in India along with liabilities like Bank Loan, incurred in relation to such assets.

To give further clarity on this, please note the Non Resident Individuals or Resident but Not Ordinary Resident or OCI Cardholders, having over Rs.50 lakhs income in India have to disclose only the details of their Assets and Liabilities located in INDIA

Immovable Assets include land and building, bank deposits, shares and securities, share in partnership firms, Insurance Policies (no need to disclose Term Insurance Policies), loans and advances given to friends and relatives, if any, cash in hand, etc.

Movable Assets include Jewellery, Bullion, Gold Bars and Coins, Vehicles, Boats, Aircraft, painting, sculpture, etc. Personal assets like wearing apparel or Furniture at home are not to be disclosed.

Where should NRI disclose their asset details and what are the information is required to be disclosed?

Non Resident are required to disclosed the Information in Schedule AL of ITR are –

a. Details of Immovable property as below:

i. Description of Immovable property

ii. Address of property

iii. Cost of the asset

b. Amount of Deposits in Bank at the end of the previous year

c. Amount of Share and Securities held currently at the end of the previous year

d. Amount of Insurance policies held currently at the end of the previous year

e. Amount of Loans or advance given, if any at the end of the previous year

f. Cost of Vehicle held currently at the end of the previous year

The Assets and Liabilities held as on the last day of the Financial Year is to be reported and thus means, if any assets are disposed during the year, it needn’t be shown in Schedule AL.

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