What is NRI Tax Filing?
NRI tax filing means filing an Indian income tax return as a non-resident for income earned or received in India, such as rent, interest, capital gains or salary for services in India. Residential status depends on days spent in India, not on citizenship. Non-residents are taxed in India only on Indian-source income.
Who needs it
- NRIs with rental income, interest or capital gains in India.
- NRIs who sold property or shares in India and want to claim a refund of excess TDS.
- Individuals who returned to India and need to determine their status.
- NRIs who want to claim credit under a double taxation avoidance agreement.
Benefits
- Correct residential status and tax computation.
- Refund of excess TDS where eligible.
- Treaty benefits and foreign tax credit, where available.
- Support with Form 15CA and 15CB for remittances.
- Online process with signing and verification from abroad.
Residential status in practice
Your status is decided year by year, by counting days in India. A person who spends 182 days or more in a year is a resident. A person who spends at least 60 days in the year and 365 days or more across the preceding four years is also a resident, but the 60-day test is relaxed for Indian citizens and persons of Indian origin who visit India, and for crew members. Higher-income Indian citizens visiting India have a stricter test, and some citizens with no tax abroad may be treated as deemed residents. Even residents are split into 'resident and ordinarily resident' and 'not ordinarily resident', which changes the tax on foreign income.
Common NRI income cases
Most non-resident returns involve one or more of four kinds of income, each with its own withholding position and its own refund question.
- Rent from property in India: tax is deducted by the tenant at a higher rate for payments to non-residents, and you can file a return to claim any excess back.
- Interest: interest on NRO accounts is taxable in India, while interest on NRE accounts is generally exempt for a non-resident.
- Property sale: capital gains tax applies, and the buyer deducts tax at source on the sale. A lower deduction certificate can reduce the deduction.
- Shares and mutual funds: capital gains tax at the rates for the type of asset and holding period.
- Salary or business income earned for work in India: taxable in India.
Understanding NRE, NRO and FCNR accounts
NRE accounts hold money from abroad and can be repatriated freely. NRO accounts hold income earned in India, such as rent and dividends, and repatriation of funds is limited, usually to an annual cap with supporting certificates. FCNR accounts are foreign-currency fixed deposits. Keeping the right money in the right account avoids tax and FEMA problems later.
Repatriating money and Form 15CA/15CB
To send sale proceeds or NRO balances abroad, the bank asks for Form 15CA and, in many cases, a CA certificate in Form 15CB showing the tax position. Starting this work before the sale, rather than after, speeds up the transfer.
Common mistakes
The recurring mistakes are about assuming withholding is the end of the matter, and about documents that have to be obtained before the event rather than after it.
- Assuming no return is needed because tax was deducted at source.
- Counting days incorrectly across the financial year.
- Not claiming the benefit of a tax treaty because the tax residency certificate was not collected in time.
- Mixing NRE and NRO funds.
- Missing the disclosure of Indian assets or income in the return.
Example: an NRI selling an inherited flat
An NRI inherits a flat and sells it after several years. The sale gives rise to a long-term capital gain. The buyer deducts tax at source on the sale. The NRI's actual tax may be lower than what was deducted, because of the indexation or the rate options available for the asset and the holding period of the previous owner. By filing a return, the NRI computes the true tax and claims a refund of any excess. To bring the money abroad, the NRI also arranges the Form 15CA and Form 15CB with the bank.
Information we ask for
The residency position is established from travel dates, so the passport matters as much as the financial records.
- Passport and visa pages with entry and exit dates
- PAN and Indian bank details
- Documents for property, shares and income earned in India
- Details of the tax paid in the country of residence, if you want to claim treaty relief
Documents required
- 01PAN, passport and visa or residency proof
- 02Dates of arrival in and departure from India for the last years
- 03Form 26AS and AIS
- 04NRO and NRE bank statements and interest certificates
- 05Rent agreements and property tax receipts
- 06Sale and purchase deeds and capital gains statements
- 07Tax residency certificate and foreign tax payment proof, where relevant
Due dates and penalties
| Item | Due date | If missed |
|---|---|---|
| ITR for non-audit cases | 31 July of the assessment year | Late fee and interest |
| Form 15CA and 15CB before remittance | Before the payment is made | Bank will not process the remittance |
TDS rates on property and other payments to NRIs change with the Finance Act. We confirm the current rates in your case.
Mistakes to avoid
- Assuming no return is needed because TDS was deducted.
- Getting the residential status wrong.
- Not claiming a lower TDS certificate before property sale.
- Ignoring the rules for repatriation from NRO accounts.
- Forgetting disclosure requirements for assets in India or abroad as applicable.
Why PHMG
- Partner-led: a chartered accountant reviews your work, not only a junior team.
- Clear fee and scope in writing before we start.
- Deadlines tracked for you, with reminders well before the due date.
- Your documents and data are handled confidentially.
- Online service across India, with a single point of contact.
Fees depend on your case. Request a quote for a clear scope and fee.