This guide is general information. If you would rather a chartered accountant handled it, see NRI Tax Filing or Form 15CA & 15CB.
NRIs pay Indian tax only on income earned or received in India, but the rules depend on residential status, which is decided by days spent in India.
Residential status in brief
An individual is a resident if present in India for 182 days or more in the year, or for 60 days or more in the year and 365 days or more in the preceding four years, with some exceptions. Otherwise the person is a non-resident. Rules for Indian citizens and persons of Indian origin visiting India, and for deemed residents, have additional conditions.
What is taxable in India for an NRI
- Rent from property in India
- Interest on NRO accounts and some other deposits
- Capital gains on Indian assets
- Salary for services rendered in India
- Business income from India
Interest on NRE accounts is generally exempt for non-residents, subject to the law.
TDS
Tax is often deducted at source at higher rates on payments to non-residents. On sale of property by an NRI, the buyer deducts TDS on the entire sale value or gain, depending on the rule. A lower deduction certificate can reduce it.
DTAA
India has agreements with many countries to avoid double taxation. You may claim relief by exemption or tax credit, usually supported by a tax residency certificate and Form 10F.
Filing
File an Indian return if your income is above the basic exemption limit, to claim a refund of excess TDS, or to report capital gains.
Common NRI scenarios
- An NRI rents out a flat in India: the tenant deducts tax at source at a higher rate. The NRI files a return to claim credit and, if the actual tax is lower, a refund.
- An NRI sells an inherited property: capital gains tax is due, and the buyer deducts tax at source. A lower deduction certificate can be applied for before the sale.
- An NRI earns interest on an NRO deposit: the bank deducts tax at source, and the income is part of the Indian return.
- An NRI returns to India permanently: residential status changes during the year, and the year may need to be split into non-resident and resident periods.
Using a double taxation treaty
If the country where you live also taxes the same income, the treaty tells you which country has the first right, and how to avoid paying twice. You normally claim credit in your country of residence for the Indian tax paid. Keep the Indian tax return, the proof of tax paid and the tax residency certificate from your country to support the claim.
Documents to keep
- Passport pages showing entry and exit dates
- Bank statements for NRE and NRO accounts
- Rent agreements, property tax receipts and sale documents
- Form 26AS and AIS for the Indian PAN
- Tax residency certificate and Form 10F for treaty claims
Why NRIs often overpay
Tax is deducted at source at high rates on many payments to non-residents, because the payer cannot know the final liability. A tenant paying rent to an NRI, a buyer paying for a property, or a bank paying interest will often deduct tax at rates higher than what the NRI would owe on a full computation. The NRI can recover the excess only by filing a return, which is why filing is worthwhile even if you think the tax was already settled.
Practical steps for a smooth year
- Keep an Indian mobile number and email active for portal alerts.
- Link your PAN with Aadhaar if you hold one, as the rules require.
- Check the tax deducted against Form 26AS before you file.
- Keep NRE and NRO funds separate, and record the source of every deposit.
- Collect a tax residency certificate from the country you live in before the year-end if you plan to claim treaty benefits.
When status changes
If you move back to India or leave India during the year, your status for that year depends on the number of days spent in India. Plan the date of return with tax in mind, because an extra few days can change the status and with it the taxation of your foreign income.
Official sources
Section 6 of the Income-tax Act deals with residential status, Section 195 with tax deducted on payments to non-residents, and the Income Tax Department publishes the list of tax treaties. The Reserve Bank of India's FEMA rules govern NRE, NRO and repatriation. Rules change, so check the current position for your case before acting.
Frequently asked questions
Does an NRI need an Indian PAN?
Yes, if the NRI earns income in India, has to file a return or wants to transact in financial assets. A PAN is also needed for most banking and investment accounts.
Do NRIs pay tax on money sent from abroad to India?
Money brought from abroad is not income, so it is not taxed. Income earned or received in India is taxable.
Can an NRI claim deductions?
Some deductions are available to non-residents, such as certain investments under the old regime. Others are restricted. We review your return to find what applies.
How often should NRIs file a return in India?
Every year in which they have taxable income above the exemption limit, want a refund, or hold assets or income that must be reported.
This content is for general information and does not constitute professional advice. Laws, rates and due dates change; confirm the current position for your case. Section references are to the Income-tax Act, 1961 unless stated; the Income-tax Act, 2025 applies to later periods with renumbered sections.