NRI Tax Services (India)

Under the Income Tax Act, you are an NRI if you are not a Resident in India. You are a Resident if you stayed in India for 182 days or more during the financial year, or 60 days in the current year plus 365 days in the preceding 4 years. RNOR (Resident but Not Ordinarily Resident) is a transitional status for returning NRIs who have been non-resident for 9 out of the preceding 10 years or stayed in India for 729 days or less in the preceding 7 years.

No. Interest earned on NRE (Non-Resident External) savings and fixed deposit accounts is completely exempt from Indian income tax under Section 10(4) of the Income Tax Act, as long as you maintain your NRI status. However, once you become a Resident (including RNOR), NRE interest remains exempt for RNOR but becomes taxable for a Resident Ordinarily Resident (ROR). NRO (Non-Resident Ordinary) account interest is fully taxable at 30% plus applicable surcharge.

The Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between India and 90+ countries. It ensures the same income is not taxed twice — once in India and again in your country of residence. For NRIs, DTAA can reduce TDS rates on dividend income (often to 10-15% from 20%), interest income, royalties, and in some cases capital gains. To claim DTAA benefits, you need a Tax Residency Certificate (TRC) from your country of residence and Form 10F declaration.

When an NRI sells Indian property, the buyer must deduct TDS at 20% (plus surcharge and cess) on long-term capital gains, or 30% on short-term gains. If the actual capital gains tax is lower than TDS deducted, the NRI can claim a refund by filing the ITR. To obtain a lower TDS rate upfront, the NRI (or buyer) can apply to the Income Tax Officer for a Certificate under Section 197 establishing the correct tax amount.

NRIs are taxed only on India-sourced income and are NOT required to report their foreign income or foreign assets in the Indian ITR. However, if an NRI qualifies as Resident Ordinarily Resident (ROR) in any year, they must report global income and all foreign assets in Schedule FA of the ITR. For Resident NRIs returning to India, the transition period under RNOR status provides relief — foreign income remains exempt during that period.