Everything an NRI needs for Indian tax, in one place. Your residential status decides WHAT India taxes; the NRI computation rules decide HOW MUCH; and the DTAA decides WHERE relief comes from. This centre links the three professional-grade calculators – built on the exact non-resident provisions most tools ignore – and covers the three questions every NRI eventually asks: what happens when I sell property in India, what happens to my NRE/NRO/FCNR deposits, and what should I do in the RNOR window when I return.
Selling property in India as an NRI – the section 195 TDS reality
When a NON-RESIDENT sells Indian property, the buyer must deduct TDS u/s 195 on the ENTIRE sale price – not on the gains, and not the 1% u/s 194-IA that applies to resident sellers. On a Rs 2 crore flat with a Rs 40 lakh gain, default TDS is about Rs 29.9 lakh against an actual tax of about Rs 6 lakh – a huge refund locked up for a year unless you act BEFORE the sale.
Buyer-side duties (yes, the buyer): obtain a TAN, deposit TDS by the 7th of the next month, file Form 27Q quarterly and issue Form 16A to the seller. Seller-side: apply for a lower/nil-deduction certificate (Form 13 u/s 197 or a 195(2) determination) BEFORE signing, plan the s.54/54EC reinvestment exemptions, and use Form 15CA/15CB for repatriating the proceeds. From FY 2026-27 the same mechanics continue under the Income-tax Act 2025 TDS schedule.
NRE, NRO and FCNR deposits – who pays tax, and when the exemption dies
| Account | Non-Resident | RNOR (returned) | Ordinarily Resident | TDS |
|---|---|---|---|---|
| NRE savings / FD | Exempt u/s 10(4)(ii) | Usually TAXABLE* | Taxable | None while exempt |
| NRO savings / FD | Taxable (slab) | Taxable | Taxable | 30% + cess u/s 195 (treaty rate with TRC + 10F) |
| FCNR(B) deposits | Exempt u/s 10(15)(iv)(fa) | Still EXEMPT | Taxable | None while exempt |
*The trap: the NRE exemption follows FEMA residency, not income-tax residency – and FEMA residency ends the DAY you return to India intending to stay. So NRE interest can become taxable immediately on return even while you are still RNOR for income-tax. FCNR is the friendly one: its exemption expressly covers RNOR, so deposits can run to maturity. NRO interest never gets a break – but a treaty cap (10-15% for most countries; 12.5% UAE) usually beats the 31.2% TDS: run it through the DTAA calculator.
Returning to India – use the RNOR window before it closes
A returning NRI typically stays RNOR (Resident but Not Ordinarily Resident) for 2 to 3 years – resident for slab purposes, but foreign income stays OUT of Indian tax and Schedule FA does not apply. This is the reorganisation window. After it, worldwide taxation and full foreign-asset disclosure begin.
NRI Taxation – Frequently Asked Questions
Who is an NRI for income-tax purposes?
Anyone who fails the residence tests of section 6 – broadly, less than 182 days in India (and, for visitors with over Rs 15 lakh Indian income, less than 120 days). The label on your passport or visa does not decide it; the day count and income tests do. Use the residential status calculator – NR, RNOR and ROR lead to completely different tax outcomes.
Which income do NRIs pay Indian tax on?
Only income received or accruing in India: Indian salary for work done here, rent from Indian property, capital gains on Indian assets, NRO interest, Indian dividends. Foreign salary and foreign investment income stay outside – that is the core difference from residents.
Do NRIs have to file an ITR in India?
Yes, if Indian taxable income exceeds the basic exemption (Rs 2.5 lakh old regime / Rs 4 lakh new regime), or to claim a refund of excess TDS (very common – NRO interest and property TDS are deducted at flat high rates), or when special-rate gains exist. Chapter XII-A income with full TDS can be exempt from filing u/s 115G. NRIs file ITR-2, not ITR-1.
How much tax do NRIs pay on property sale?
Long-term gains (held over 24 months) are taxed at 12.5% plus surcharge and cess – but TDS u/s 195 is deducted on the FULL price (effectively 13-14.95%) unless a lower-deduction certificate is obtained. Short-term gains are taxed at slab. Exemptions u/s 54 (reinvest in a house) and 54EC (capital gains bonds, Rs 50 lakh cap) are available to NRIs too.
Is money sent to India (remittance) taxable?
No – transferring your own foreign earnings to India is not income and is never taxed. What gets taxed is income that ARISES in India: interest the remitted money then earns in an NRO/resident account, rent, gains. Gifts from relatives are exempt; gifts over Rs 50,000 from non-relatives are taxable u/s 56(2)(x).
What is the 15 lakh / 120-day rule everyone talks about?
Since FY 2020-21, an Indian citizen or PIO visiting India becomes resident at just 120 days (instead of 182) if their Indian-source income exceeds Rs 15 lakh – though the 120-181-day band lands them in RNOR, which still protects foreign income. High-earning frequent visitors should count days carefully every year.
Can NRIs claim 80C and other deductions?
In the old regime, yes with limits: 80C (insurance, ELSS, tuition, home-loan principal – but not PPF/NSC/SCSS which NRIs cannot open), 80D, 80E, 80G, 80TTA on NRO savings interest. Not available: 80TTB and the disability sections. The new regime blocks almost all deductions for residents and NRIs alike.
How does the DTAA actually help an NRI?
Two ways. On Indian income, the treaty caps Indian tax on interest, dividends and royalties below domestic rates (with a TRC and Form 10F). On foreign income of RESIDENTS, the treaty prevents double taxation through the Foreign Tax Credit. Run both directions through the DTAA and FTC calculator – including the famous US/Canada dividend case where the treaty is worse than domestic law.
What happens to my tax status when I return to India permanently?
You typically pass through RNOR for 2-3 years – foreign income stays exempt and no Schedule FA – before becoming ordinarily resident with worldwide taxation. The RNOR window is the time to restructure: convert NRE accounts (taxable immediately under the FEMA rule), keep FCNR to maturity, realise foreign gains, and inventory foreign assets for future disclosure.
Do NRIs pay advance tax and interest u/s 234B/C?
Yes, when net liability after TDS exceeds Rs 10,000 – typical where rent or capital gains had low or no TDS. Where payers deducted correctly (NRO 30%, dividends 20%, property u/s 195), little may remain. Estimate with the 234 interest calculator.
Is Aadhaar or PAN mandatory for NRIs?
PAN is effectively essential (TDS, property, refunds) though Rule 37BC lets treaty relief work without it for interest/royalty/FTS/dividend. Aadhaar is NOT mandatory for non-residents; the Aadhaar-PAN linking requirement applies to residents. NRIs without PAN can even e-file Form 10F after the 2023 portal update.
Did the new Income-tax Act 2025 change NRI taxation from FY 2026-27?
Substantively almost nothing: same residency thresholds, same rates, renumbered sections (6 restructured, 115A becomes 207, 90 becomes 159). Two real changes: unlisted-share gains can again be computed in the original foreign currency (s.72(6) – a saving), and the FTC form becomes Form 44 with a 12-month deadline and CA verification above Rs 1 lakh of foreign tax.
Where do I start if all of this is new to me?
In order: (1) determine your exact status with the residential status calculator; (2) compute Indian tax on your Indian income with the NRI income tax calculator; (3) if any income is taxed in two countries or TDS exceeds a treaty cap, run the DTAA/FTC calculator; (4) for a property sale, use the TDS estimator above and act on Form 13 before the deed. Complex positions – deemed residency, RNOR planning, treaty tie-breakers – deserve professional advice.