I am an NRI (non-resident Indian) living in the United Kingdom. I have NRO (non-resident ordinary) deposits with some banks in India. I want to avail lower taxation benefit under DTAA (Double Tax Avoidance Agreement) on interest income on NRO deposits. My tax consultant advised me to file form 10F before filing my tax return. Is it mandatory?
-Name withheld on request
To claim treaty benefits under a particular DTAA, you need to possess a ‘Certificate of Tax Residence’ (TRC) from the country in which you reside. Apart from TRC, you are also required provide form 10F for claiming benefits under the corresponding DTAA.
Information that are required to be furnished online under form 10F pertain to the status of the taxpayer, nationality, tax identification number in home country, coverage of period for tax residency in the home country, and taxpayer’s address in the home country. However, if all these data are captured in your TRC itself, you are not obligated to submit form 10F online.
I shifted to the US for a job 2 years ago. I stopped contributions to my PPF account after I moved here. I’m confused if I’m eligible for the new tax regime. I earn NRO interest income in India and continue to pay EMIs on the house property that I had bought in India before I left.
-Name withheld on request
The new tax regime has become the default tax regime vide Finance Act 2023. For individuals, it is applicable whether the taxpayer is a resident or a non-resident. As an NRI, you can continue your PPF till maturity. However, since you are no longer contributing to it, you are not eligible for deduction (up to ₹1,50,000) under Section 80C. Therefore, you can explore opting for the new tax regime.
As for your property, if it qualifies as a self-occupied property, then bear in mind that under the new tax regime you will no longer be able to claim any deduction for the interest on the housing loan you pay. On the other hand, if you have let out that property or it qualifies as a deemed let-out property, and the computation of ‘income from house property’ results in a loss, then you will no longer be able to set-off this loss against the interest income, under the new tax regime.
Harshal Bhuta is a partner at chartered accountancy firm P.R. Bhuta & Co.
