NRI Income Tax in India: Residential Status and Basics

Residential status decides everything

Your tax treatment depends on your residential status for the financial year, which is decided mainly by the number of days you spent in India. In broad terms, staying 182 days or more in a year makes you a resident, with additional tests based on 60 days in the year and 365 days over the previous four years. Special rules apply to Indian citizens who leave India for employment or visit India, so do not rely on a single number.

What income is taxed in India for an NRI

• Rent from property in India
• Interest on NRO accounts and fixed deposits
• Capital gains on property, shares or mutual funds in India
• Salary for services rendered in India
• Income from a business or profession in India

Income generally not taxed in India

Income earned and received outside India is generally not taxable in India for a non-resident. Interest on NRE accounts is generally exempt while you remain an NRI, but NRO interest is taxable. Check your own status before relying on this.

TDS and why refunds happen

Banks, tenants and property buyers often deduct tax at source (TDS) before paying an NRI. The rates can be higher than the final tax you owe. Filing a return lets you claim a refund of excess TDS. In some cases a lower deduction certificate can be obtained in advance.

Do I have to file a return?

You generally need to file if your taxable income in India exceeds the basic exemption limit, or if you want to claim a refund or carry forward losses. Many NRIs file even when they are not strictly required, to keep a clean record.

Double taxation relief

India has tax treaties with many countries. If your income may be taxed in both places, treaty benefits can reduce the burden. You may need a tax residency certificate from your country of residence.

Documents to keep ready

• PAN and passport copy
• Passport entry and exit stamps showing days of stay
• Bank statements and TDS certificates
• Rent agreements and property tax receipts
• Capital gains statements and sale and purchase documents

Rules, thresholds and due dates change. This guide is general information, not legal, tax or financial advice. Confirm current requirements with the official portal or a qualified professional before acting. See our Terms & Disclaimer.