NRI Tax Filing Overview

NRIs are taxable in India only on income that accrues or arises in India, or is deemed to accrue or arise in India. This includes salary for services rendered in India, rental income from Indian property, interest on NRO accounts, capital gains on Indian assets, and dividends from Indian companies. Income earned and received outside India is not taxable in India for NRIs.

Most NRIs file ITR-2, which covers salary income, house property income, capital gains and other income, along with Schedule FA for foreign assets and foreign income. If the NRI has business or professional income in India, ITR-3 is used. The correct form depends on the nature of Indian income — we determine the right form for your situation.

Yes, tax is deducted at source on most payments to NRIs at rates prescribed under Section 195 of the Income Tax Act or the applicable DTAA rate — whichever is beneficial. TDS rates on NRI income are often higher than for residents: for example, 30% on NRO interest and 20%/30% on capital gains. Filing a return allows you to claim a refund of excess TDS.

An NRI must file a tax return if: total income before deductions exceeds the basic exemption limit; they have capital gains on which lower treaty rates apply; they wish to carry forward losses; or they want to claim a refund of excess TDS. Even if not legally required, filing a return is often beneficial to establish your tax position and claim refunds.

NRIs are entitled to the basic exemption limit of ₹2.5 lakh (old regime) or ₹3 lakh (new regime) for general taxpayers. However, unlike resident senior citizens, NRIs do not get the higher exemption limits of ₹3 lakh or ₹5 lakh based on age. Capital gains income for NRIs is subject to special rates and may be taxed before the basic exemption is applied.

Yes. If India has a Double Taxation Avoidance Agreement with the country where the NRI is a tax resident, and the NRI holds a valid Tax Residency Certificate (TRC) and Form 10F, they can claim the lower withholding rate under the DTAA. This can significantly reduce TDS on interest, royalties and other income. We handle TRC-based DTAA claims for all major treaty countries.

Interest on NRE (Non-Resident External) accounts is fully exempt from Indian income tax. Interest on NRO (Non-Resident Ordinary) accounts is taxable in India and subject to 30% TDS. NRO accounts receive Indian-source income like rent, dividends and pension, while NRE accounts hold foreign earnings remitted to India. Proper account classification is important for tax planning.

Contact N D Savla & Associates in Panaji, Goa. We specialise in NRI taxation — from residential status determination and Indian income computation to ITR filing, TDS refund claims and DTAA applications. We serve NRIs in all countries including UAE, USA, UK, Australia, Canada and Singapore.