Income Tax for NRI in India — Complete Filing Guide FY 2025-26

Q: How to determine NRI status for income tax purposes?

Under the Income-tax Act 2025, an individual is a Non-Resident Indian (NRI) if they stay in India for fewer than 182 days during the financial year. A secondary test: if you visited India for fewer than 60 days in the current year AND fewer than 365 days cumulatively over the 4 preceding years, you are also classified as NRI. Count days carefully — both arrival and departure days count as days in India. Note: Indian citizens or PIOs going abroad for employment use the 182-day threshold only (not the 60-day alternative).

Q: Which ITR form should an NRI file?

NRIs cannot use ITR-1 (Sahaj) — ITR-1 is restricted to residents with income up to ₹50 lakh from salary/pension/one house property only. NRIs should use: ITR-2 for salary, house property, capital gains (from Indian assets), or if they hold foreign assets/foreign bank accounts. ITR-3 if they have business or professional income in India. Business income NRIs subject to audit use the extended 31 October due date. All others: 31 July.

Q: Is NRI double taxed on India income?

Generally no, because India has Double Taxation Avoidance Agreements (DTAA) with 90+ countries. Under DTAA, income taxed in India can usually be credited against your home-country tax. For example, if you pay 30% tax in India on rental income, your country of residence (say the UK or USA) typically allows a Foreign Tax Credit for the Indian tax paid, so you do not pay full tax twice on the same income. To claim DTAA: submit Tax Residency Certificate (TRC) + Form 10F to the payer in India.

Q: Can NRI invest in PPF or NPS in India?

PPF: NRIs cannot open a new PPF account. However, if you opened a PPF account as a resident before becoming NRI, you can continue it until maturity (15 years) under the same terms, but cannot extend further after maturity. NPS: NRIs can subscribe to NPS (National Pension System). Both Tier-I and Tier-II NPS accounts are allowed for NRIs. Contributions qualify for 80CCD deductions under the old regime. At maturity/exit, NPS corpus is remittable abroad (subject to FEMA regulations).

Updated: 3 June 2026 | Income-tax Act 2025 | FY 2025-26

NRIs pay income tax in India only on India-sourced income — global income is not taxable here. Residential status under the Income Tax Act determines tax scope. NRIs file ITR-2 for capital gains or foreign assets; due date 31 July. DTAA with 90+ countries prevents double taxation. NRE and FCNR interest is fully exempt.

USD 1M

Annual NRO → NRE Repatriation Limit
After paying Indian taxes, NRIs can transfer up to USD 1 million per financial year from NRO to NRE or abroad. This requires CA certificate in Form 15CB and submission of Form 15CA (Part C) online before remittance.

Residential Status — NRI, RNOR, and Resident

Your residential status for each financial year determines which income is taxable in India. Three categories exist under the Income-tax Act 2025:

Status	Stay in India (FY)	India Income Taxable?	Foreign Income Taxable?	Benefit Period
NRI (Non-Resident)	<182 days*	Yes	No	Every year of non-residency
RNOR (Resident but Not Ordinarily Resident)	182+ days (recent returnee)	Yes	No (except business controlled from India)	2–3 years after returning to India
Resident (Ordinarily Resident)	182+ days	Yes	Yes — global income	—

*Secondary test: also NRI if <60 days in current FY and <365 days cumulatively in preceding 4 FYs (does not apply to Indian citizens/PIOs going abroad for employment).

Income Taxable for NRI in India

An NRI is taxed only on income that accrues or arises in India, or is received in India. The following table covers the most common income types:

Income Type	Taxable for NRI?	Tax / TDS Rate	Notes
Salary for work done in India	Yes	Slab rates	Even if paid abroad; work location determines taxability
Rent from Indian property	Yes	30% TDS	Tenant must deduct TDS; NRI files ITR to reconcile
LTCG on Indian equities / MF	Yes	12.5%	Above ₹1.25L; TDS deducted by broker/fund
STCG on Indian equities / MF	Yes	20%	Post Finance Act 2024
Capital gains on Indian property	Yes	12.5% / 30%	LTCG 12.5% (held 24m+); STCG 30%; buyer deducts TDS
NRO account interest	Yes	30%	Bank deducts TDS; DTAA can reduce rate
NRE account interest	Fully Exempt	—	Section 10(4) exemption
FCNR account interest	Fully Exempt	—	Section 10(15) exemption
Dividends from Indian companies	Yes	20% TDS	DTAA rates apply if applicable
Foreign salary (work done abroad)	Not Taxable in India	—	Taxable only in country of employment

ITR Form Selection for NRI

Choosing the wrong ITR form can lead to a defective return notice. NRIs must select based on income type and presence of foreign assets:

NRI Scenario	ITR Form	Due Date	Notes
Only salary from India, no foreign assets, income <₹50L	ITR-1*	31 July	*Only if NRI is a resident — NRIs cannot file ITR-1 if they have foreign assets
Salary + house property + capital gains (India)	ITR-2	31 July	Most common form for NRIs
Any foreign bank account / foreign asset	ITR-2	31 July	Schedule FA mandatory for foreign assets
Business or professional income in India	ITR-3	31 July / 31 Oct*	*31 Oct if tax audit applicable
Partner in Indian firm / LLP	ITR-3	31 July / 31 Oct*	Firm's return due date may extend individual due date

Advance Tax, Repatriation & Key Compliance Points

Advance Tax: If total Indian tax liability exceeds ₹10,000 in a financial year (after TDS credits), advance tax must be paid in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March. Failure attracts interest under Sections 234B and 234C.

Repatriation: NRO to NRE/abroad transfer allowed up to USD 1 million per financial year (all current income plus accumulated savings after tax). Requires Form 15CB (CA certificate) and Form 15CA (online submission by NRI on Income Tax portal) before remittance.

87A Rebate: NRIs cannot claim the Section 87A rebate of ₹60,000 available to resident taxpayers with income up to ₹12 lakh. The new regime default applies to NRIs as well, but since they typically cannot claim most deductions, the tax liability must be computed carefully.

FEMA Compliance: Property purchases by NRIs must comply with RBI/FEMA guidelines. Agricultural land, plantation property, and farmhouses cannot be purchased by NRIs (gifts or inheritance are exceptions). Report required within 90 days of purchase using IPI Form with RBI.

Frequently Asked Questions

How to determine NRI status for income tax purposes?

Under the Income-tax Act 2025, an individual is a Non-Resident Indian (NRI) if they stay in India for fewer than 182 days during the financial year. A secondary test: if you visited India for fewer than 60 days in the current year AND fewer than 365 days cumulatively over the 4 preceding years, you are also classified as NRI. Count days carefully — both arrival and departure days count as days in India. Note: Indian citizens or PIOs going abroad for employment use the 182-day threshold only (not the 60-day alternative).

Which ITR form should an NRI file?

NRIs cannot use ITR-1 (Sahaj) — ITR-1 is restricted to residents with income up to ₹50 lakh from salary/pension/one house property only. NRIs should use: ITR-2 for salary, house property, capital gains (from Indian assets), or if they hold foreign assets/foreign bank accounts. ITR-3 if they have business or professional income in India. Business income NRIs subject to audit use the extended 31 October due date. All others: 31 July.

Is NRI double taxed on India income?

Generally no, because India has Double Taxation Avoidance Agreements (DTAA) with 90+ countries. Under DTAA, income taxed in India can usually be credited against your home-country tax. For example, if you pay 30% tax in India on rental income, your country of residence (say the UK or USA) typically allows a Foreign Tax Credit for the Indian tax paid, so you do not pay full tax twice on the same income. To claim DTAA: submit Tax Residency Certificate (TRC) + Form 10F to the payer in India.

Can NRI invest in PPF or NPS in India?

PPF: NRIs cannot open a new PPF account. However, if you opened a PPF account as a resident before becoming NRI, you can continue it until maturity (15 years) under the same terms, but cannot extend further after maturity. NPS: NRIs can subscribe to NPS (National Pension System). Both Tier-I and Tier-II NPS accounts are allowed for NRIs. Contributions qualify for 80CCD deductions under the old regime. At maturity/exit, NPS corpus is remittable abroad (subject to FEMA regulations).

Income Tax For Nri Near You

Expert CA/CS assistance for income tax for nri across India. Click your city for local details.

→ New Delhi → Mumbai → Bengaluru (Bangalore) → Hyderabad → Chennai → Kolkata → Pune → Ahmedabad → Noida (UP) → Gurgaon (Gurugram) → Jaipur → Lucknow → Chandigarh → Surat → Kochi (Cochin) → Faridabad → Ghaziabad → Greater Noida → Panipat → Sonipat → Manesar (IMT) → Dharuhera → Mathura → Palwal → Agra → Kosi Kalan → Aligarh → Khair → Jewar (Noida International Airport) → Kanpur → Varanasi (Kashi) → Prayagraj (Allahabad) → Meerut → Bareilly → Moradabad → Gorakhpur → Firozabad → Saharanpur → Muzaffarnagar → Bulandshahr → Hapur → Karnal → Kurukshetra → Ambala → Hisar → Rohtak → Yamunanagar → Rewari → Bhiwani → Jodhpur → Udaipur → Kota → Ajmer → Bikaner → Ludhiana → Amritsar → Jalandhar → Patiala → Mohali (SAS Nagar) → Bathinda → Dehradun → Haridwar → Rudrapur → Shimla → Solan (Baddi-Barotiwala-Nalagarh) → Bhopal → Indore → Gwalior → Jammu → Srinagar → Panchkula

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