Schedule IV explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Schedule IV to the Income-tax Act, 2025 lists income of eligible non-residents, foreign companies and other such persons that is not included in total income, subject to conditions. This article covers serial numbers 1 to 8 of its Table: interest on a Non-Resident (External) Account, embassy and consulate officials, employees of foreign enterprises, crew of foreign ships, Government employees in training, notified foreign companies, the National Technical Research Organisation and offshore banking interest. Serial numbers 9 to 14 are in our note on Schedule IV, serial numbers 9 to 14.
This explanation is as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Schedule IV is among the Schedules amended by the Finance Act, 2026 (section 124); this note explains the text as it stands. Under section 1(3) the Act came into force on the 1st April, 2026, save as otherwise provided. Later amendments, rules and notifications should be checked. For where the earlier Act's provisions on exempt income sit in the 2025 Act, see our mapping note on exemptions and the Schedules.
Schedule IV, brought in by section 11, says that in computing the total income of a tax year of an eligible person named in column C, the income in column B is not included, subject to the conditions in column D. The Table has four columns: A (serial number), B (income), C (eligible persons) and D (conditions). Serial numbers 3 and 4 use a ninety-day stay test. Serial numbers 6 and 7 depend on notification and on dealings with the National Technical Research Organisation. Serial number 8 covers offshore banking unit interest on deposits made on or after 1 April 2005. For non-resident return questions see non-resident tax filing.
How to read the Table
The Schedule is headed "Income not to be included in total income of eligible non-residents, foreign companies and other such persons". The expressions used in columns B to D have the meanings given in the Notes below the Table. Each row is reproduced below with its column heads.
Serial numbers 1 and 2
| Serial number | Income (column B) | Eligible persons (column C) | Conditions (column D) |
|---|---|---|---|
| 1 | Any income by way of interest | (a) An individual who is a resident outside India as defined in section 2(w) of the Foreign Exchange Management Act, 1999 (42 of 1999); or (b) an individual who has been permitted by the Reserve Bank of India to maintain the said account | Such interest is on moneys standing to the credit of such person in a Non-Resident (External) Account in any bank in India as per the said Act and the rules made thereunder |
| 2 | Any remuneration received for service in the capacity as an official mentioned in column C, not being a citizen of India | An official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign State, or a member of the staff of any of these officials | (a) The remuneration received as a trade commissioner or other official representative in India of the government of a foreign State (not holding office as such in an honorary capacity), or as members of the staff, if any, of the government, resident for similar purposes in the country concerned enjoy a similar exemption in that country; and (b) the members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in India otherwise than as members of such staff |
The Foreign Exchange Management Act, 1999 is another law; check it for the definitions it supplies. At serial number 2 the condition in clause (a) is one of reciprocity: the same kind of exemption must be enjoyed in the other country. The wording of clause (a) is quoted as printed.
Serial numbers 3 and 4: the ninety-day tests
| Serial number | Income (column B) | Eligible persons (column C) | Conditions (column D) |
|---|---|---|---|
| 3 | Any remuneration received as an employee for services rendered by him during his stay in India | A person who is an employee of a foreign enterprise, not being a citizen of India | (a) The foreign enterprise is not engaged in any trade or business in India; (b) his stay in India does not exceed in the aggregate a period of ninety days in such tax year; and (c) such remuneration is not liable to be deducted from the income of the employer chargeable under this Act |
| 4 | Any income chargeable under the head "Salaries", received or due as remuneration for services rendered in connection with his employment on a foreign ship | Any individual being a non-resident, not being a citizen of India | The total stay of such individual in India does not exceed in the aggregate a period of ninety days in the tax year |
At serial number 3 all three conditions (a), (b) and (c) are joined by "and", so each must be met. For residential status, see our note on section 6.
Serial number 5: Government employees in training
| Serial number | Income (column B) | Eligible persons (column C) | Conditions (column D) |
|---|---|---|---|
| 5 | Any remuneration received as an employee of the Government of a foreign State | An employee of the Government of a foreign State, not being a citizen of India | Such remuneration is received during his stay in India in connection with his training in any establishment or office of, or in any undertaking owned by (a) the Government; (b) any company in which the entire paid-up share capital is held by the Central Government or any State Government or State Governments, or partly by the Central Government and partly by one or more State Governments; (c) any company which is a subsidiary of a company referred to in clause (b); (d) any corporation established by or under a Central Act, State Act or Provincial Act; or (e) any society registered under the Societies Registration Act, 1860 (21 of 1860), or under any other law and wholly financed by the Central Government, or any State Government or State Governments, or partly by the Central Government and partly by one or more State Governments |
The condition lists five kinds of establishment; the training must be in one of them. The Societies Registration Act, 1860 is another law and is quoted as printed.
Serial numbers 6 and 7: foreign companies and the National Technical Research Organisation
| Serial number | Income (column B) | Eligible persons (column C) | Conditions (column D) |
|---|---|---|---|
| 6 | Any income arising by way of royalty or fees for technical services | Any foreign company | (a) Such company is notified by the Central Government; and (b) such income is received in pursuance of an agreement entered into with the Central Government for providing services in or outside India in projects connected with security of India |
| 7 | Any income arising by way of royalty from, or fees for technical services rendered in or outside India | A non-resident, not being a company, or a foreign company | (a) Such royalty is received from the National Technical Research Organisation; or (b) such fees is for technical services rendered to the National Technical Research Organisation |
The notified companies at serial number 6 are not named in the text consulted. Serial number 7 is printed with letter-spaced words in the copy; they are read as ordinary words. Clause (a) and (b) at serial number 7 are joined by "or", so either suffices.
Serial number 8: offshore banking units
| Serial number | Income (column B) | Eligible persons (column C) | Conditions (column D) |
|---|---|---|---|
| 8 | Interest received | Non-resident or a person who is not ordinarily resident | Such interest is received in India on a deposit made on or after the 1st April, 2005 in an Offshore Banking Unit referred to in section 2(u) of the Special Economic Zones Act, 2005 (28 of 2005) |
The Special Economic Zones Act, 2005 is another law; check it for the definition. The Table in the copy consulted is cut by page headers repeated between rows; every cell for serial numbers 1 to 8 was readable.
A worked example (names and facts assumed)
Mr. Karan, a foreign national, is an employee of Westfield Overseas Limited, a foreign enterprise with no trade or business in India. (All names and facts are assumed.)
- During a tax year he stays in India for 40 days on a project (assumed). The ninety-day limit in serial number 3, condition (b), is met: 40 days is within ninety days in aggregate.
- His remuneration is not liable to be deducted from the income of the employer chargeable under the Act (condition (c) assumed met), and the foreign enterprise is not engaged in trade or business in India (condition (a) assumed met). The remuneration for services rendered during the stay is therefore not included in his total income.
- If, in another tax year, his aggregate stay were 95 days, condition (b) would fail (95 exceeds ninety), and serial number 3 would not apply to that year.
Need help with a non-resident's return?
Whether a payment falls under Schedule IV depends on who received it, where they stayed and what the conditions say. Our non-resident tax filing team can review your facts against these rows.
Key takeaways
- Schedule IV excludes the income in column B of eligible persons named in column C, subject to conditions in column D.
- Interest on a Non-Resident (External) Account is covered for the individuals described at serial number 1.
- Serial numbers 3 and 4 use an aggregate stay limit of ninety days in the tax year.
- Serial number 6 needs a company notified by the Central Government and an agreement for projects connected with security of India.
- Serial number 7 covers royalty or fees involving the National Technical Research Organisation.
- Serial number 8 covers interest received in India on deposits made on or after 1 April 2005 in an Offshore Banking Unit.
Read next
- Schedule IV, serial numbers 9 to 14: income of foreign companies and other persons
- Schedule V: investment funds, business trusts and venture capital income
- Section 6: residential status
- Schedule I: exempt income
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.