If you are a Non-Resident Indian (NRI), understanding your tax obligations in India is crucial. Many NRIs are unaware that certain Indian incomes are taxable regardless of where you live.
Determining Your Residential Status
Your tax liability in India depends on your residential status:
- **NRI**: In India for less than 182 days during the financial year (or 120 days under certain conditions if Indian income exceeds ₹15 lakhs)
- **RNOR (Resident but Not Ordinarily Resident)**: Transitional status with limited Indian tax exposure
- **Resident**: In India for 182 days or more — worldwide income is taxable in India
The exact calculation depends on your travel history over the financial year and the preceding 7 years.
What Income Is Taxable for NRIs?
As an NRI, only your Indian-sourced income is taxable in India:
- Salary received for services rendered in India
- Rental income from Indian property
- Capital gains from sale of Indian assets (property, shares, mutual funds)
- Interest income from Indian bank accounts (NRO accounts)
- Income from business or profession carried on in India
Income earned and received outside India is NOT taxable for NRIs.
DTAA Benefits
India has Double Tax Avoidance Agreements (DTAAs) with over 90 countries. These treaties help prevent double taxation:
- **Reduced TDS rates** on interest, royalties, and fees for technical services
- **Exemption from tax** on certain types of income depending on the treaty
- **Tax credits** for taxes paid in India against your tax liability in the country of residence
For example, the India-USA DTAA can reduce TDS on interest income from 30% to 15%.
How to File ITR as an NRI
You can file your Indian tax return 100% online:
- Determine which ITR form applies (usually ITR-2 for NRIs with capital gains)
- Gather all Indian income documents (Form 26AS, AIS, rental agreements, sale deeds)
- Compute your tax liability with applicable DTAA benefits
- File on the income tax portal and pay any balance tax
At Jigar Shah & Associates, we specialize in NRI taxation. We serve NRI clients across USA, UK, UAE, Singapore, and Australia. Contact us for hassle-free NRI ITR filing.