The Income Tax Department of India defines an NRI, or a Non-Resident Indian, as an individual of Indian origin but living outside the Indian subcontinent.
The Section 6 of the Indian Income Tax Act defines the NRI status of an individual more precisely. According to this section, an individual is considered an NRI if,
? He or she resides outside the country for a minimum of 182 days in the previous year.
? He or she was living outside the country for 60 days in the previous year, and for a combined 365 days in the past four years.
The taxable income for NRIs, and the corresponding rules, differs significantly from that applicable to resident citizens.

When Can the Income Tax Department Tax NRIs?

Any income generated outside the country cannot be taxed by the Income Tax Department as long as the individual maintains his non-resident status. Nevertheless, all sources of income generated through Indian resources by an NRI will be duly taxed by the Government.

What Types of Taxable Income Sources Are Commonly Associated with NRIs?

NRIs may generate capital gain through sale, rent or lease of properties for commercial, industrial or residential purposes. Some individuals may invest in one or more fiscal resources like shares, commodities and other resources that may offer significant monetary returns. Also, there are some categories of NRIs who receive income from an Indian company, such as professionals who visit foreign nations for long term business projects and receive dual salaries. In all the above cases, NRIs are expected to file for tax returns.
However, NRIs must qualify for the following two conditions in order to be eligible for tax payment.
? The taxable income for NRIs must be more than the exemption limit of INR 2 Lakhs.

? All monetary gains generated through sale of any investment or property must be taxed even if it is below the 2 Lakhs limit.

What Tax Exemptions Apply to NRIs?

All NRIs (irrespective of their age) are taxed according to the rules that are applied to resident Indians below 60 years of age. For tax returns, NRIs who have generated taxable income only through investment sources or long term capital gains are not eligible.

Every NRI must be well-versed with information related to tax rules and regulations to understand how taxes are levied, to avoid any violations and to ensure that filing of tax returns is carried out smoothly.

CIBIL, Credit Information Bureau India Limited, is an important part of the financial system in India as it provides critical credit information about every individual and rates them based on their creditworthiness. The system has its own way of analysis which results in a credit rating for every individual called the CIBIL score.

The CIBIL score is used by lenders, banks and credit card providers to assess an individual’s credit history, the potential risk associated with the person and to approve their loan applications. The score is calculated using several factors, such as income, age, gender, education and existing bank accounts, and ranges between 300 and 900. Every bank and financial institution has its own benchmark of a good CIBIL score and scrutinizes loan applications based on these numbers.

How Reliable is a CIBIL Score?

CIBIL scores are derived using standardized algorithms without manual intervention. Thus the chances of error or manipulation are minimal. In case of queries, the individual can always approach CIBIL for clarifications.

Why is a CIBIL Score Important?

A good CIBIL score plays a significant role in the economic journey of an individual. The CIBIL score influences several financial facets for an individual such as:

Approval of Loans: Housing loans, vehicle loans and medical loans are some of the most commonly availed favours from a financial institution. Almost every Indian citizen avails a bank loan at least once in his lifetime. A good CIBIL score ensures easier and quicker approval of loans. In general, most banks consider it safe to sanction loans to individuals with a CIBIL score of 700 or more.

Better Interest Rates: CIBIL scores have a directly proportional relationship with bank interest rates. The better the score, the higher is the power to negotiate the rate of interest. In some cases, banks may also lower the processing fees for those candidates with a good CIBIL score.

Easier Credit Card Approvals: Credit cards have become an important part of today’s lifestyle. Paying through credit cards offers a number of benefits like customer rewards, money-back offers and special discounts in the consumption of essential entities like fuel. The CIBIL score is used to determine your eligibility for credit card approvals and the granted credit limit on the card. A good CIBIL score offers several credit card options to choose from and makes the entire process hassle-free. It is important to remember that balance transfers to a new card or closing your existing credit cards impacts the credit utilization and may be reflected through the CIBIL score.