NRI Income Tax in India: The Basics
For non-resident Indians, the first question isn't "how much tax" — it's "what am I taxed on at all". The answer hinges on your residential status, which is determined by how long you have been in India.
Residential status comes first
Indian tax law classifies you as Resident or Non-Resident based on the number of days you're physically in India during the year (and across prior years). A resident is generally taxed on worldwide income; a non-resident is taxed only on income that is earned in or sourced from India. The day-count tests have specific thresholds and special rules, so determine your status for the year in question carefully.
What income is taxable in India for an NRI
- Salary for services rendered in India, or received in India;
- Rent from a property located in India;
- Capital gains on Indian assets (shares, property — see our capital gains guide);
- Interest from Indian bank accounts (e.g., NRO), subject to the relevant rules.
TDS and double-tax relief
Payments to NRIs often attract TDS at higher rates. If your country of residence has a Double Taxation Avoidance Agreement (DTAA) with India, you may be able to claim relief so the same income isn't fully taxed twice — usually with a Tax Residency Certificate and the prescribed forms.
Which ITR form?
ITR-1 (Sahaj) is for residents, so NRIs generally cannot use it. Most NRIs file ITR-2 (or ITR-3 if they have business income). Because residency and form rules carry nuances and change, NRIs should confirm their status and form, and often benefit from professional help.
Resident filing a simple return?
MyTaxLocker prepares ITR-1 and ITR-4 for residents. NRI returns are usually ITR-2/ITR-3 and fall outside the app — but if you're a resident with a Form 16, it'll get you a ready-to-upload JSON fast.
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