Section 115G of ITA, 1961 : Section 115G: Return Of Income Not To Be Filed In Certain Cases

Explanation using Example

Imagine a non-resident Indian (NRI), Mr. Arjun, who has invested in Indian stocks. During the financial year, he only earns dividend income (which is his investment income) and also makes a profit from selling some stocks after holding them for more than a year, which qualifies as long-term capital gains. The total of these earnings is Rs. 10 lakhs for that year.

As per Indian tax laws, tax has been deducted at source (TDS) on both the dividend income and the long-term capital gains by the respective companies before crediting the earnings to Mr. Arjun's account. Since Mr. Arjun's income for the year comprises solely of investment income and long-term capital gains, and the appropriate TDS has been applied, he falls under the criteria mentioned in Section 115G of the Income-tax Act, 1961.

Under Section 115G, Mr. Arjun is not required to file a return of income in India for that year, provided the conditions are met, which in this scenario, they are. This provision simplifies the tax compliance process for NRIs like Mr. Arjun who have only certain types of income from India with applicable taxes already deducted at source.