For Non-Resident Indians (NRIs) earning income in both India and the UK, tax compliance can be challenging. Navigating tax laws in two countries, avoiding double taxation, and filing the necessary forms require expert guidance. With India for NRI, NRIs can efficiently manage their tax obligations in both nations and benefit from tax treaties such as the India UK Double Taxation Avoidance Agreement.

Understanding UK and Indian Tax Rules for NRIs

India's Tax Implications for NRIs with UK Income

NRIs are taxed in India only on income earned or accrued in India. This includes rental income, capital gains, and earnings from Indian businesses or investments.

NRIs must comply with:

• Income tax rules for Indian expats in the UK to ensure proper tax reporting.

• Form 16A to document TDS deductions on Indian income.

• Schedule FA for reporting foreign assets while filing Indian tax returns.

UK Taxation for Indian Expats

NRIs living in the UK are subject to UK tax on worldwide income if they are tax residents. However, NRIs who qualify for the remittance basis are taxed only on UK income and remitted foreign income.

Key tax considerations:

• UK tax implications for Indian residents determine how different income sources are taxed.

• UK tax on overseas assets for NRIs governs taxation on Indian investments.

• UK self-assessment tax return for NRIs is required for individuals with foreign income.

Avoiding Double Taxation with DTAA India UK

NRIs earning in both countries may face double taxation but can claim relief under the Double Taxation Avoidance Agreement India UK. This agreement helps taxpayers avoid paying taxes on the same income twice.

Key DTAA Benefits for NRIs in the UK from India

• DTAA benefits for NRIs in the UK from India allow tax credits on income taxed in India.

• Form 10F must be submitted to claim DTAA benefits.

• Form 67 is required for claiming Foreign Tax Credit (FTC) in India.

• Form 10BA can be used for deductions related to housing rent paid abroad.

How to File Taxes in Both Countries?

Filing Tax Returns in India

1. Report UK Income: NRIs must declare UK earnings in Indian tax returns.

2. Claim Foreign Tax Credit: Use Form 67 to offset UK taxes paid.

3. Submit Relevant Forms: Include Schedule FA and Form 16A for accurate filing.

4. Consider DTAA Provisions: Apply for India UK Double Taxation Avoidance Agreement benefits.

Filing Tax Returns in the UK

1. Disclose Indian Income: Report taxable Indian earnings in the UK tax return.

2. Apply for Tax Exemptions: Use UK self-assessment tax return for NRIs to claim relevant deductions.

3. Utilize DTAA: Reduce double taxation by leveraging DTAA benefits for NRIs in the UK from India.

Remitting Indian Income to the UK

NRIs transferring funds from India to the UK must comply with Indian tax laws.

• Form 15CA CB is required for remittance of taxable income.

• Form 15CA and 15CB ensure tax compliance on outward remittances.

Conclusion

Tax compliance for NRIs earning in India and the UK can be streamlined with expert assistance from India for NRI. By leveraging India UK Double Taxation Avoidance Agreement benefits, filing the correct forms, and staying compliant with both tax authorities, NRIs can minimize tax liabilities and maximize their savings.

Need expert tax guidance? Visit India for NRI for seamless tax filing support