| Income Range | Tax Rate | Cess (4%) |
|---|---|---|
| Up to ₹2,50,000 | 0% | 0% |
| ₹2,50,001 - ₹5,00,000 | 5% | 4% |
| ₹5,00,001 - ₹10,00,000 | 20% | 4% |
| Above ₹10,00,000 | 30% | 4% |
Your tax liability in India depends entirely on your residential status. The Income Tax Act classifies individuals as Resident, RNOR, or NRI based on physical presence in India during the financial year and preceding years.
| Status | Condition | Tax Scope in India |
|---|---|---|
| Resident | ≥ 182 days in India | Global income taxable |
| RNOR | Recent return to India | Indian income + foreign business income |
| NRI | < 182 days in India | Only Indian income taxable |
Even a small change in days spent in India can change your tax treatment. Always calculate your residential status before filing your return.
If you're an NRI living abroad but earning income in India, the tax rules depend on whether you're actually an NRI or still considered a resident. The simplest way to check: If you stayed in India for more than 182 days in a financial year, you're likely a resident. If less, you're an NRI and have different tax treatment. Your income abroad is not taxed in India as an NRI, but all income earned in India - rent from property, interest from bank deposits, capital gains from selling Indian assets - everything is fully taxable here.
For FY 2025-26, as an NRI, you're taxed at flat rates on most Indian income. Rent from property? 30% flat rate after standard deduction. Long-term capital gains from property? 20% with indexation. Short-term capital gains? 30% flat. Interest from NRO accounts? Fully taxable in your income tax slab. The good news is interest from NRE and FCNR accounts is completely tax-free. But all income where TDS is deducted, you need to calculate if any additional tax is due or if you can claim refund.
Many NRIs face confusion because of TDS. Most of your income has TDS cut at source - rent has 30% TDS, interest income has TDS depending on the amount, capital gains have TDS when you sell property. What's important is to reconcile all this TDS at the end of the year. If you've paid more TDS than your actual tax liability, you can claim refund. If you've paid less, you need to pay the balance. Our NRI calculator helps you figure this out accurately.
If you've sold property or stocks in India during the year, the capital gains tax calculation for NRIs is complex because of indexation benefits and exemptions like Section 54 and 54F. Use our capital gains calculator to understand exactly how much tax you need to pay. Also, if you have salary from India (even if working remotely), get your Form 16 and use the income tax calculator to ensure all calculations are correct.
For more details on NRI taxation and residential status rules, check the Income Tax Department's FAQ page at NRI taxation FAQs which explains residential status, which income is taxable, and special provisions for NRIs.
As an NRI, only income that arises or is received in India is taxable. Foreign income earned and received outside India is not taxed in India.
| Income Type | Taxable in India? | Remarks |
|---|---|---|
| Salary for services in India | ✅ Yes | Even if paid abroad |
| Rental income from Indian property | ✅ Yes | 30% standard deduction allowed |
| Interest from NRO account | ✅ Yes | Fully taxable |
| Interest from NRE / FCNR | ❌ No | Completely tax-free |
| Foreign salary / business income | ❌ No | Not taxable for NRIs |
Most Indian income earned by NRIs is subject to Tax Deducted at Source (TDS). In many cases, TDS is deducted at a higher rate than the actual tax payable, making it important to file ITR and claim refund where applicable.
| Income Type | TDS Rate | Notes |
|---|---|---|
| Rent from property | 30% | Plus cess & surcharge |
| Property sale (capital gains) | 20% / 30% | Based on LTCG / STCG |
| NRO interest | 30% | DTAA may reduce |
| Dividends | 20% | Subject to DTAA |
If DTAA applies, you may be eligible for lower TDS. Excess TDS can be claimed as refund by filing your return.
NRI taxation errors often happen due to incorrect residential status, misunderstanding DTAA provisions, or ignoring excess TDS. Avoiding these common mistakes can save significant tax and compliance issues.
1. Assuming foreign income is taxable in India
2. Not filing ITR due to TDS already deducted
3. Ignoring DTAA benefits despite eligibility
4. Not claiming refund on excess TDS
5. Using resident bank accounts incorrectly
6. Not reconciling Form 26AS and AIS
An individual is considered NRI if they are not resident in India. This is determined by the number of days spent in India during the financial year and previous years.
NRIs are taxed only on their Indian income, which includes salary from Indian sources, rental income from Indian property, capital gains from Indian assets, and interest/dividends from Indian investments.
DTAA (Double Taxation Avoidance Agreement) helps NRIs avoid paying tax twice on the same income. It provides relief through lower tax rates, foreign tax credit, and specific provisions for different types of income.
Yes, NRIs must file ITR in India if their Indian income exceeds ₹2.5 lakh. Even if income is below this threshold, filing ITR is recommended for various benefits and compliance.
Foreign tax credit allows NRIs to claim credit for taxes paid in foreign countries on the same income. This prevents double taxation and reduces the overall tax burden.