Taxes collected from citizens form the backbone of the Indian economy. Under the Indian Income Tax Act, 1961, NRIs — individuals earning income outside India — are subject to specific tax rules. These regulations and benefits differ significantly from those applicable to resident Indians.
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Ready Your NRI Taxation.
Auriga Accounting has a team of registration experts who can provide complete guidance to register your NRI Taxation
Our team of experts will get in touch with you and collect all necessary documents and details
We fill out and file your application for ITR Filing
Ready Your NRI Taxation.
Many Indians spend a large part of the year abroad, raising the question — do they still need to pay taxes in India? The answer depends on their residential status and income source. The Indian Income Tax Act, 1961 covers both residents and Non-Resident Indians (NRIs), though tax rules and benefits vary between the two.
This guide breaks down NRI taxation — from rules to exemptions — helping you understand your obligations and perks. For expert assistance with filing returns, claiming deductions, or navigating complex tax laws, Auriga Accounting offers reliable guidance to ensure a smooth, stress-free tax experience.
If you’re classified as a Non-Resident Indian (NRI) for income tax purposes, only the income earned or accrued in India is taxable. Any foreign income — earnings generated outside India — is not taxable in India.
Here’s a breakdown of the key types of income taxable for NRIs:
2. Rental Income:
3. Capital Gains Income:
4. Interest Income: Interest earned on Fixed Deposits (FDs) and savings accounts in India is taxable. Interest on NRE accounts is exempt, but interest on NRO accounts is taxable.
5. Other Income: Dividends, pension income, and business income earned or accrued in India are taxable.
NRIs follow the same income tax slabs as residents — without age-based exemptions:
Surcharge and cess apply for higher incomes:
You’re classified as an Indian resident for a financial year if:
1.Stayed in India for 182 days or more during the financial year.
2.Stayed in India for 60 days or more in the financial year and 365 days or more in the last 4 years.
Exceptions: For Indian citizens working abroad, Indian ship crew, or Persons of Indian Origin (PIO) with income ≤ ₹15 lakh (excluding foreign income) — only the 182-day rule applies.
You qualify as RNOR if:
Finance Act 2020 Update:
Indian citizens earning ₹15 lakh+ from Indian sources and not taxable in any other country are deemed residents (classified as RNOR).
Salary Income: Taxable in India if received in India or on your behalf (e.g., deposited in an Indian account). If services are rendered in India, the salary is taxable — even if paid abroad.
Government Employees: Indian citizens working for the Government of India (e.g., in embassies or international projects) are taxed in India, even if services are rendered outside India. Diplomats and Ambassadors are exempt from taxation.
Example: Ajay, working in China for an Indian company, wanted his salary sent to his Indian bank account for family and loan payments. Since salary received in India is taxable, Ajay chose to receive it directly in China to avoid Indian taxation.
Taxable Property Income: Income from property located in India (rented or vacant) is taxable for NRIs. Calculated the same way as for residents.
Deductions Allowed:
Example: Nandini, living in Bangkok, earns rental income from her house in Goa — it’s taxable in India.
Tenant’s responsibility: TDS at 30% must be deducted before rent payment. Rent can be sent to an Indian account or NRI’s foreign account.
Example: Maria pays ₹30,000 monthly rent to her NRI landlord — she must deduct ₹9,000 (30% TDS) before transferring the money.
Forms Required:
Exceptions:
Interest Income:
Income from Business/Profession: Income from a business controlled or set up in India — taxable in India.
Capital Gains:
Special Provisions for Investment Income:
Form 15CA: The tenant must submit Form 15CA online to the Income Tax Department. It reports details of the payment made to the NRI landlord and ensures TDS compliance.
Form 15CB:
New Income Tax Bill 2025: Updated Tax Residency Rules for NRIs
The Income Tax Bill 2025, introduced on February 13, 2025, and effective from April 1, 2026, brings major changes for NRIs, Persons of Indian Origin (PIOs), and frequent visitors to India.
The 182-Day Rule (Unchanged):
Modified 60-Day + 365-Day Rule:
The 120-Day Rule for High-Income NRIs/PIOs:
For NRIs/PIOs earning ₹1.5 million or more from India:
For visitors stuck due to the lockdown:
Income distributed to partners is tax-free in their hands (partners pay tax on other personal income).
You qualify as NOR if:
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