When it comes to disclosure of overseas accounts of NRI’s, there is a lot of confusion and chaos pertaining to the disclosure of the overseas accounts in their tax returns in India. This issue has been clarified in a press release dated 24th July 2019, by the Income Tax department.
Declaration of Income Tax Returns by NRI
While filing the tax returns in India, disclosing the overseas bank accounts is not mandatory for NRI’s. If there is any refund, an NRI will have to provide the bank account in India, which is held by them.
Only in case an NRI does not have any bank account in India, and they need to claim a refund, only then can they mention their foreign bank account details so that the refund gets credited to that account.
Hence, those NRI’s who do not claim a refund do not have to furnish their foreign bank account details. Also, those NRI’s who have to claim a refund and have a bank account in India, need not provide their foreign bank account details in the income tax returns.
The Importance of Bank Account in India for NRI’s
Generally, any refund that is generated on the processing of income tax returns, at present, is credited directly into the taxpayer’s bank accounts. It is mandatory to furnish the bank account details to which the refund has to be credited. So, all those NRI’s who have to claim a refund and don’t have a bank account in India will find it tough to get a refund. This is sole because initially, no column was available in the return form to report the details of the foreign bank account that was being held by NRI’s in order to claim a refund.
Hence, based on the representations obtained from the NRI’s, the Income Tax department provided the option to the NRI’s to report their foreign bank accounts in the form of the income tax return so as to claim the refunds.