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Table of Content
- Who is an NRI?
- What Income is Taxable for NRIs?
- Eligibility for NRIs to File Income Tax Return (ITR) in India:
Income Tax Return for NRI
Who is an NRI?
Before we dive into the tax implications, let’s understand the definition of an NRI for tax purposes.
Under the Indian Income Tax Act, 1961, your residential status determines whether you’re an NRI or not. You are treated as a Non-Resident Indian (NRI) if:
• You did not stay in India for 182 days or more during the financial year,
OR
• You were not in India for 60 days or more in the financial year and have not stayed in India for 365 days or more in the previous 4 years.
• An individual is considered an NRI for tax purposes if they do not meet the criteria for being a resident under the Income Tax Act
What Income is Taxable for NRIs?
Only income earned or accrued in India is taxable for NRIs, including:
• Salary earned in India
• Rental income from Indian property
• Capital gains on Indian assets (like shares or property)
• Interest from NRO accounts
• Dividends from Indian companies
Foreign income is not taxable in India for NRIs.
Eligibility for NRIs to File Income Tax Return (ITR) in India:
Before knowing whether you need to file an ITR, you must determine if you’re an NRI under the Income Tax Act, which uses number of days stayed in India as the basis.
You are treated as an NRI if:
You meet either of the following conditions:
- You were not in India for 182 days or more during the financial year (April 1 – March 31), OR
- You were not in India for 60 days or more in the financial year AND not in India for 365 days or more in the preceding 4 years
Special Cases:
- For Indian citizens or PIOs (Persons of Indian Origin) visiting India, the 60-day limit is extended to 182 days, unless their total Indian income exceeds ₹15 lakh, in which case different thresholds apply (120 or 60 days).
- Deemed Residency Rule (from FY 2020–21): Indian citizens with total income exceeding ₹15 lakh (excluding foreign income) and not liable to tax in any other country may be deemed residents and not eligible for NRI benefits.
NRI Income Tax Slabs – FY 2024–25 (AY 2025–26):
NRIs are taxed as per individual slab rates but don’t get certain benefits like:
- No Section 87A rebate
- No senior/super senior slab benefits (even if 60+)
- Can choose Old or New Tax Regime
FAQs for Income Tax Return for NRI
An individual is treated as a Non-Resident Indian (NRI) if they do not meet the conditions of residency under Section 6 of the Income Tax Act. Generally, you are an NRI if you stay in India for less than 182 days in a financial year.
Yes, if your total Indian income exceeds ₹2.5 lakh, you must file an ITR, even if tax is already deducted (TDS).
No, only the income earned or received in India is taxable. Global income is not taxed in India for NRIs.
Most NRIs need to file ITR-2, unless they have business or professional income in India, in which case they must use ITR-3.
Yes, for certain investments made in India like LIC premiums, ELSS, tuition fees, etc.
No. NRIs are not eligible for the ₹12,500 tax rebate under Section 87A.
No, interest earned on NRE accounts is tax-free in India.
Yes, interest from NRO accounts is fully taxable, and TDS is usually deducted at 30%.
NRIs who have obtained Aadhaar voluntarily and are filing returns may be required to link PAN with Aadhaar, though it’s not mandatory if they don't have one.
Yes, NRIs can e-file their tax returns easily from anywhere in the world via the Income Tax Department's portal.
Yes, NRIs can avoid being taxed twice by claiming DTAA benefits. They must submit a Tax Residency Certificate (TRC) and Form 10F.
Yes, rental income from Indian property is taxable in India under "Income from House Property."
Related Business Registrations
In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.
