Schedule FSI & TR For NRI: How To Fill It In ITR?

Schedule FSI and Schedule TR are two separate sections in Form 2 of the ITR. Individuals who have paid taxes on foreign income and are seeking tax refunds in India for that income will file under these two schedules. 

Here, FSI in the schedule stands for Foreign Source Income. Under this schedule, you will need to report your income details before that arising from a source outside India. Whee under scheule TR, you will report the tax refunded (TR) to provide a summary of the tax relief claimed against the taxes you have paid outside India. 

In this blog, we will discuss Schedule FSI and Schedule TR, including how to fill them while filing the ITR. 

Instructions For NRIs With Respect To Schedule FSI

As mentioned, residents of India who earn income from a foreign source must also submit the FSI Schedule in ITR-2. However, an NRI (non-resident Indian) and RNOR (Resident but Not Ordinarily Resident) do not need to report their foreign-source income in ITR-2. 

Now, on the contrary side, if an NRI receives any kind of income from India, it is taxable in nature. Any NRI earning more than Rs 2.5 lakh is liable to file an income tax return regardless of their residency status. Henceforth, if an NRI is earning more than Rs 2.5 lakh in India, they are eligible to file an Income tax return in India. 

How To Fill FSI Schedule & Get Tax Relief?

In the section of Schedule FSI, you will mention the details of the income earned from any country outside India. The following instructions must be followed when filing ITR-2. 

• In column C of the ITR form, you will have to mention the tax amount you have outside India on your foreign income. 
• Now, if you are applying for tax relief, enter the amount for the tax in Column D of the form. 
• Enter the country's ISD code as the country code. 
• Lastly, you must provide your TIN (taxpayer identification number) for the country where you paid the taxes. In case you haven't yet allotted the TIN, use your passport number. 

Instructions For NRI With Respect To Schedule TR

NRIs and individuals paying taxes outside India can claim tax relief in India. However, to claim the TR, they must report it on Form ITR-2. NRIs who earn income from sources taxable in India are liable to file an income tax return. 

Under the regulatory framework, individuals must report their foreign assets and liabilities in ITR-2 under the FSI, TR, and TA schedules if they have availed tax relief. 

Henceforth, NRIs paying taxes outside Indian can submit a schedule TR if they have a taxable income source in India. 

How To Fill the TR Schedule And Claim Tax Relief?

As an NRI, once you have visited the official e-filing portal of the Income Tax Department, you now need to go to the return filing section and select ITR-2.

See the instructions below for completing the TR schedule. 

As an NRI, you must mention the tax details you have paid abroad. Ensure that this tax is paid on the income that you have mentioned in Schedule FSI. 

Enter the ISO code as the country code and your TIN (Taxpayer Identification Number). 

Note: If you haven't yet allocated the TIN, you can use your passport number. 

Now fill in the tax relief (TR) claimed under Section 90, 90A, or 91 of the Income Tax Act in the required columns. 

Once all the information is filled out in the form, you can submit the ITR-2 return. Just ensure to proceed with the verification to get the acknowledgement form. 

Tax Relief For Small Taxpayers

If the ordinary Indian tax resident fails to provide the details under Schedule FSI and TR, then there is a penalty of Rs 10 lakh on the same under the balck money act. The 2024 budget, however, has replaced the penal provision, under which the penalty will not apply if the average value of the non-disclosures does not exceed the Rs 20 lakh threshold. 

The Bottom Line

And that's a wrap on how to submit Schedule FSI and TR for NRIs. Any non-resident Indian earning income from a foreign source can check the minimum taxable income slab to determine whether they are required to file an income tax return.

In a nutshell, Schedule FSI and TR are generally applicable to Resident taxpayers. NRIs are required to fill these schedules only if the foreign income becomes taxable in India or if DTAA relief is claimed against income taxable in India.

As an NRI, if you are seeking any professional assistance in helping you file your ITR in India, Savetaxs is the name to trust. Our NRI tax experts, certified public accountants, and enrolled agents manage the entire tax preparation and submission process, all while ensuring cross-border compliance. 

Furthermore, our experts help you maximize your savings through tax deductions, calculate your tax liability, prepare your financial statements, and more. 

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