Schedule FSI & TR for NRI: How to Fill FSI & TR Schedule in ITR?

Schedule FSI and Schedule TR are two sections in ITR-2 that need to be filled only if an individual has paid taxes on foreign income and is claiming tax relief against that in India. FSI stands for Foreign Source Income. Thus, you need to report the details of your income arising from a source outside India under this schedule. 

Similarly, you must report Tax Relief (TR) under Schedule TR to provide a summary of the tax relief claimed against the taxes you have paid outside India. Read along to know more about FSI and TR Schedules in ITR.

Budget 2024 Update

Budget 2024 proposes not levy penalty of Rs.10 lakhs under section 42 and 43 of the Black Money Act for movable assets where the aggregate value does not exceed Rs 20 lakhs.

Schedule FSI Instructions for NRI

As already mentioned, resident Indians earning from a foreign source need to submit FSI Schedule in ITR 2. However, NRI or non-residential Indians are not liable to report their income generated from a foreign country in ITR-2. 

On the other hand, if an NRI receives any income from India, it is taxable. Anyone earning more than Rs. 2.5 lakh is liable to file income tax irrespective of their resident status. Thus, if an NRI earns more than Rs. 2.5 lakhs in India, he/she is liable to file income tax returns. 

NRIs need to fill Schedule FSI and Schedule TR if the foreign income is taxable in India and another country and on which any tax relief has been claimed in India.

How to Fill FSI Schedule and Get Relief?

In the Schedule FSI section, you must enter the details of income earned from any country outside India. Here are the instructions you need to follow while filing the ITR 2 form:

• In column C, you need to mention the tax amount you have paid outside India on the income generated from a foreign country.
• If you are applying for tax relief under FSI, mention the tax relief amount in column D.
• Enter the ISD code of the country as the country code.
• You must enter the TIN (Taxpayer Identification Number) as per the country where you have paid the tax. If you are not allotted a TIN, you can use your passport number.

Schedule TR Instructions for NRI

Individuals paying tax outside India can claim tax relief (TR) in India; however, they must report it in the ITR-2 form. Non-resident Indians generating income from a source that is taxable in India are liable to file the ITR. According to the Income Tax Act, individuals must report their foreign assets and liabilities in the ITR 2 form under FSI, TR, and TA Schedules if they have claimed tax relief. So, NRIs paying taxes outside India can submit TR Schedule if their income source is taxable in India.

How to Fill TR Schedule and Get Relief?

After you visit the official e-filing portal of the Income Tax Department, you need to navigate to the returns filing section and select ITR-2. 

Check out the following instructions on how to fill the TR Schedule in ITR 2:

• You must mention the tax details you paid in a foreign country. This tax should be paid on the income you have mentioned in Schedule FSI.
• Enter the ISD code as the country code and your TIN (Taxpayer Identification Number).

Note: In case you are not allotted a TIN, you can also mention your passport number.

• Fill in the tax relief (TR) claimed under Sections 90, 90A, or 91 of the Income Tax Act in the required columns.

After filling up all the required information in the form, you can go ahead with submitting the ITR-2 return. Make sure to proceed with the verification to get the acknowledgement form. 

Relief to Small Taxpayers

If ordinary tax residents of India fails to furnish details under Schedule FSI and TR, then there was a penalty of Rs. 10 lakhs on the same under the Black Money Act. This budget has relaxed the penal provisions wherein the penalty will not be applicable if the aggregate value of non-disclosure does not exceed Rs. 20 lakhs

Final Word

So, now you know all about submitting Schedule FSI and TR for non-resident Indians. NRIs generating income from a foreign source can check the minimum taxable income slab to check whether they are liable to file ITR. Schedule FSI and TR are to be submitted by an NRI only if the income is taxable in both countries, but the relief for tax paid in a foreign land has been claimed in India.