NRIs Financial Year End: From Taxes to Investments

As the financial year draws to a close, it’s important for Non-Resident Indians (NRIs) to review their financial affairs and take necessary actions to avoid any penalties or losses. In India, NRIs are required to file their income tax returns (without late fees) by July 31st, but the earlier they file, the better.

In this comprehensive guide, we’ll take you through the steps you should take in the next two days to end your financial year properly and ensure that you don’t lose money in taxes and penalties. We’ll also provide you with tips on what you should do in the coming months to prepare for the next financial year, including making investments in real estate and insurance plans for safer returns.

So, if you’re an NRI looking to secure your finances, read on to find out how you can maximize your returns and minimize your liabilities.

PART 1: WHAT TO DO IN THE NEXT TWO DAYS TO END YOUR FINANCIAL YEAR PROPERLY

As the financial year comes to a close, it’s important for NRIs to ensure that they have taken all necessary steps to minimize their tax liabilities and avoid penalties. Here are some important things to keep in mind:

File your income tax returns:

NRIs should ensure that they have filed their income tax returns for the financial year by the deadline of 31st July. However, it’s better to file early to avoid a last-minute rush and to minimize the risk of errors.

Check your TDS credits:

NRIs should verify their Tax Deducted at Source (TDS) credits to ensure that they have received credit for all TDS amounts deducted from their income. In case of any discrepancies, it’s important to notify the relevant authorities to rectify the same.

Review your investments:

NRIs should review their investments in Indian financial markets, including stocks, mutual funds, and bonds. If you have any investments that are not performing well, consider selling them before the end of the financial year to offset your tax liabilities.

Make charitable donations:

NRIs can make charitable donations to eligible organizations before the end of the financial year to claim tax deductions under Section 80G of the Income Tax Act.

Review your insurance policies:

NRIs should review their insurance policies, including health, life, and home insurance, to ensure that they are adequately covered. Consider buying additional insurance coverage if required.

PART 2: WHAT TO DO IN APRIL-MAY-JUNE TO PREPARE FOR THE COMING FINANCIAL YEAR

As the new financial year begins, NRIs should take steps to prepare themselves and their chartered accountants to pay taxes and make investments in the coming year. Here are some important things to keep in mind:

Review your tax planning strategies:

NRIs should review their tax planning strategies for the coming year, including investments that offer tax deductions, such as Insurance Plans, Equity Linked Saving Schemes (ELSS), Public Provident Fund (PPF), and National Pension System (NPS).

Plan your investments:

NRIs should plan their investments in advance to maximize their returns and minimize their tax liabilities. Consider investing in mutual funds, real estate, or other investment options that offer tax benefits.

Consult a financial advisor:

NRIs should consult a financial advisor to understand their investment options and tax planning strategies. A financial advisor can help you create a customized investment plan that meets your financial goals and objectives.

Check your parent’s finances:

NRIs should check their parent’s finances, including their investments, insurance policies, and other financial assets. Consider consolidating their investments and insurance policies to ensure that they are adequately covered.

Make investments in insurance plans:

NRIs should consider making investments in insurance plans that offer safer returns, such as Unit-Linked Insurance Plans (ULIPs), endowment plans, and term plans. These plans offer long-term investment opportunities and provide tax benefits under Section 80C of the Income Tax Act.

In Conclusion

NRIs should ensure that they take the necessary steps to end their financial year properly and plan their investments in the coming year to minimize their tax liabilities and maximize their returns. It’s important to file income tax returns before the deadline of 31st July and provide all necessary details and documents, such as bank statements, real estate purchase agreements, loan statements, etc., to their chartered accountants to facilitate the tax filing process. Consulting a financial advisor can also help in creating a customized investment plan that meets your financial goals and objectives.