NRI taxation and income tax for non-residents
Indian tax compliance for non-resident Indians and returning Indians, handled from Borivali West, Mumbai, and remotely for clients overseas. The work starts with residential status for the year and then applies the right treatment to each source of Indian income.
Scope
What the work covers
A non-resident is taxed in India only on income that arises or is received in India. In practice, most NRIs still have Indian income: interest on NRO deposits, rent from a flat in Mumbai, dividends, mutual fund redemptions or the sale of a property. Each of these carries its own withholding rate, reporting and repatriation rules.
From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act, and the familiar 'previous year' and 'assessment year' are replaced by a single 'tax year'. The substance of NRI taxation is largely carried forward, but section and form numbers have changed, so older guidance found online needs to be read with care.
- Determining residential status for the year, including RNOR status for Indians returning after years abroad
- Tax on NRO interest, rent, dividends and capital gains, and the exemption for NRE deposit interest
- Sale of property in India by a non-resident: computation of gains, TDS by the buyer, and lower or nil deduction certificates
- Relief under tax treaties (DTAA), with Tax Residency Certificate and Form 10F
- Remittance documentation: Form 15CA and the chartered accountant's certificate in Form 15CB
- Income tax return filing for non-residents and claims of excess TDS as refund
- Replies to tax department notices and AIS mismatches for NRI taxpayers
Approach
How the work is done
Establish status
Days of stay in India for the year and the preceding years are counted from passport records, and Indian income is totalled to apply the stay and deemed-residency tests.
Map every income source
Bank, broker, mutual fund and property records are matched against the Annual Information Statement so that nothing reported by third parties is missed.
Plan withholding before it happens
For a property sale, the expected gain is computed early. Where TDS on the full sale value would far exceed the actual tax, an application for a lower deduction certificate is made before the sale deed.
File and repatriate
The return is filed with treaty claims where applicable, refunds are tracked, and Form 15CA/15CB documentation is prepared for moving funds abroad.
Getting started
Records to keep ready
- Passport pages with entry and exit stamps, or travel history
- NRE and NRO bank statements and interest certificates
- Purchase and sale deeds, and cost of improvement records, for any property
- Tax Residency Certificate from the country of residence, where treaty relief is claimed
- Login access to, or downloads of, AIS and Form 26AS
Background
Ryan Vaz, FCA has lived and worked as a finance professional in Uganda and Tanzania, and understands from both sides how residency, foreign tax credits and remittances play out for Indians abroad. See experience and expertise.
Fees
Fees depend on the scope of work, the volume and condition of records and the time required, and are confirmed in writing in an engagement letter before work begins.
Questions about NRI taxation
Does an NRI need to file an income tax return in India?
An NRI must file a return if total Indian income exceeds the basic exemption limit. Filing is also the only way to claim a refund where TDS deducted (for example on NRO interest or a property sale) is more than the tax actually payable, so many NRIs file even when not strictly required to.
Is interest on NRE deposits taxable?
Interest on NRE deposits is exempt in India for a person who qualifies as a non-resident or RNOR under foreign exchange rules. NRO interest is taxable in India and is subject to TDS at a higher rate than for residents, though treaty rates may apply with the right documents.
How much TDS does a buyer deduct when an NRI sells property?
The buyer is required to deduct tax on the sale consideration at the rate applicable to the non-resident's capital gain, plus surcharge and cess, unless the seller obtains a lower or nil deduction certificate. Because the deduction is on the sale value, not the gain, the certificate often makes a large difference to cash received.
What is RNOR status?
Resident but Not Ordinarily Resident is a transitional status, usually available to Indians returning after a long period abroad. During RNOR years, foreign income is generally not taxed in India unless it is derived from a business controlled or a profession set up in India.
Can an NRI repatriate the proceeds of a property sale?
Funds in an NRO account, including sale proceeds, can be remitted abroad up to USD 1 million per financial year, subject to tax having been paid. The bank will usually ask for Form 15CA and, above the specified limits, a chartered accountant's certificate in Form 15CB.
Contact
Phone +91 95384 16161 or email ryan@vazassociates.in. Office opposite Maxus Mall, L.T. Road, Borivali West, Mumbai 400092. Work can also be handled remotely.