Non-Resident Taxation

For a non-resident, the first question is not "what rate applies?" but "what is my residential status this year?" Status decides how much of your income India can tax, and it can change without you noticing: a long family visit, a gap between overseas jobs or an early return can each move you from non-resident to resident. Most surprises in an NRI's tax position start here.

We advise NRIs, foreign nationals and Indians returning home on status, treaty relief, TDS, returns and repatriation, in India and abroad.

Step one: your residential status

Status is worked out afresh for every financial year (April to March), based on the days you were physically in India. Citizenship, passport and where you consider home do not decide it.

• 182-day test: in India for 182 days or more during the year.
• 60 + 365 test: in India for 60 days or more during the year and 365 days or more in the four years before it.
• 120-day variation: for Indian citizens and persons of Indian origin visiting India whose income other than foreign income is more than ₹15 lakh, the 60 days becomes 120 days.
• Deemed residence: an Indian citizen with such income above ₹15 lakh who is not liable to tax in any other country is treated as resident (but not ordinarily resident), whatever the number of days.

Every later calculation depends on this answer, so we check the tests carefully each year against your passport and travel records. See also residential status determination.

What India taxes when you are a non-resident

A non-resident pays Indian tax only on income that arises in India or is received in India. Typical examples:

• Salary for work done in India, wherever it is paid
• Rent from property in India
• Capital gains on Indian property, shares, mutual funds and other securities
• Interest on NRO accounts and other Indian deposits (interest on NRE and FCNR accounts is generally exempt while you are non-resident)
• Profits from a business carried on in India

Income earned and received entirely abroad, such as an overseas salary, foreign rent or foreign bank interest, is generally outside Indian tax for a non-resident. People often assume the rule is wider or narrower than it is, so it is worth checking before you file.

TDS on payments to NRIs

Tax is deducted at source from most payments to non-residents, usually at higher rates than for residents. Property sales show this most clearly: under section 195 the buyer generally deducts tax on the whole sale price, not just on your gain, which can lock up a large amount until your refund is processed.

Where the TDS would be more than your actual tax, a lower or nil TDS certificate can be obtained from the tax department before the transaction. On a single property sale the difference can run into lakhs, and it is far easier than waiting a year for a refund.

Treaty (DTAA) relief

India has double taxation avoidance agreements with around 90 countries, so the same income is not taxed in full in both India and your country of residence. Relief works in one of two ways:

• Exemption: the income is taxed in one country only.
• Credit: both countries may tax it, and your country of residence gives credit for the Indian tax.

Relief is not automatic. You need a tax residency certificate from your country of residence and Form 10F, both in hand before the claim is made. A treaty also does not mean zero Indian tax; it means the same income is not taxed twice. Which method applies depends on the treaty, the type of income and the two countries involved. More on our tax treaty advisory page.

Beyond NRI status: international tax for residents

• Residents with foreign bank accounts, overseas employer shares or property abroad must report foreign assets in Schedule FA of their return, a separate obligation from the NRI rules.
• Businesses with cross-border transactions between related parties have transfer pricing documentation to maintain.
• When your status changes, from NRI to resident or back, the rules that apply to you change too. A returning NRI needs to understand the resident-side disclosures from the first year back.

Repatriating money from India

Moving money out of India follows FEMA limits and procedures; it is not an ordinary bank transfer.

• Sale proceeds of Indian property are credited first to your NRO account, not straight to an NRE or overseas account.
• From NRO balances you can generally repatriate up to USD 1 million per financial year, once the tax due has been paid.
• Your bank will ask for Form 15CA and, where needed, Form 15CB before sending the money.
• NRE balances are already tax-paid and freely repatriable; the USD 1 million limit does not apply to them.

Getting the order wrong, for example sending sale proceeds directly abroad without routing them through the NRO account, is a common cause of bank queries and delays later.

How status changes the whole picture

Someone returning to India for good usually qualifies as RNOR for a transition period before worldwide income becomes taxable. That window is the time to decide when to bring foreign assets or income to India and when to sell investments. For example, selling a foreign asset while still non-resident may fall outside Indian tax, while the same sale a year later as a resident could be fully taxable. Plan this before you move.

Staying compliant through the year

• A return is required once your Indian income is above the basic exemption limit, and is worth filing below it when TDS has been deducted and a refund is due.
• Advance tax applies if your tax for the year, after TDS, is more than ₹10,000, on the same quarterly dates as residents.
• Match the interest, dividends and other income in Form 26AS and AIS with your NRO and NRE statements before filing; mismatches are a common source of notices.
• If you are claiming treaty relief, have the tax residency certificate and Form 10F ready before you file, not afterwards.

How we help

NRI tax rarely stops at one return. It usually spans TDS planning before a sale, a treaty claim, the return itself and repatriation, often over several years. Handling only the return, without the planning before it, can cost more in stuck refunds and delayed transfers than the advice would have. We work from your facts, your treaty and your status: we identify the right relief, arrange the tax residency certificate and Form 10F, document the claim before filing, and coordinate with your bank for the remittance.

Common questions

How is my residential status decided?

Mainly by days in India: 182 days or more in the year, or 60 days in the year plus 365 days over the previous four years. The 60 days becomes 120 days for Indian citizens and persons of Indian origin with Indian income above ₹15 lakh, and deemed residence can apply to citizens who are not taxed as residents anywhere else.

Do I pay Indian tax on income I earn abroad?

Generally not, while you are a non-resident. Only income arising or received in India is taxable, such as Indian salary, rent or gains on Indian assets.

Why is the TDS on my property sale so high?

It is usually deducted on the full sale price rather than the gain. A lower or nil TDS certificate, applied for before the sale, deals with this.

Does a treaty mean I pay no tax in India?

No. It prevents the same income being taxed twice, through exemption or credit. India can still tax income that arises here.

What do I need to claim treaty relief?

A tax residency certificate from your country of residence and Form 10F, in place before the claim is made in your Indian return.

How much can I repatriate each year?

Up to USD 1 million per financial year from NRO balances, after tax and with Forms 15CA / 15CB filed with your bank. NRE balances are not subject to this limit.

What happens to my tax status when I return to India for good?

You will usually be RNOR for a transition period, when only Indian income and income from India-controlled businesses is taxed. Plan around this window before you move.

Section and form numbers on this page refer to the Income-tax Act, 1961 and its rules. From 1 April 2026 the Income-tax Act, 2025 applies, with new section and form numbers; the requirements described here are broadly unchanged. We use whichever numbering applies to your transaction date.