Step one: residential status
Your tax in India depends on your residential status for the year, not your passport. In broad terms:
- Resident: in India for 182 days or more in the year, or 60 days in the year and 365 days in the preceding four years (for Indian citizens and persons of Indian origin visiting India, and citizens leaving for employment abroad, the 60-day test becomes 182 days; it is 120 days for visitors whose Indian income exceeds ₹15 lakh).
- Resident but not ordinarily resident (RNOR): typically returning NRIs in the first years back; foreign income generally stays outside Indian tax.
- Deemed resident: an Indian citizen with Indian income above ₹15 lakh who is not liable to tax in any other country.
- Non-resident: taxed only on income received or arising in India.
Check yours with the residential status calculator.
NRI tax services
- Income tax returns for NRIs: rent, interest on NRO deposits, capital gains, and refund of excess TDS.
- Sale of property in India: capital gains computation, reinvestment exemptions and the lower TDS certificate.
- Repatriation: Form 15CA and the CA certificate in Form 15CB for remittances from NRO accounts.
- DTAA relief: Tax Residency Certificate, Form 10F and foreign tax credit.
- Returning to India: RNOR planning, foreign assets reporting and bank account re-designation.
Selling property in India as an NRI
- The buyer must deduct TDS on the capital gain portion at the rates for non-residents, plus surcharge and cess. In practice buyers often deduct on the full sale value, locking up a large refund.
- To avoid that, apply for a lower or nil TDS certificate before the sale. Under the Income-tax Act, 2025 this is issued under section 395 (application in Form 128), replacing section 197 and Form 13.
- Long-term capital gains on property are taxed at 12.5%. Exemptions under sections 54 and 54EC are available to NRIs if you reinvest within the time limits.
- File the return to claim the refund of excess TDS.
- Repatriate sale proceeds through the NRO account within the permitted limit, with Form 15CA/15CB.
Accounts and interest
| Account | Tax on interest in India |
|---|---|
| NRE savings and fixed deposits | Exempt while you remain a non-resident |
| FCNR deposits | Exempt while non-resident (and for RNORs) |
| NRO deposits | Taxable; TDS deducted by the bank at non-resident rates, reducible under DTAA |
Documents usually needed
- Passport pages with entry and exit stamps, or travel history.
- PAN, NRO/NRE bank statements and Form 16A or TDS certificates.
- Property purchase and sale deeds, improvement bills.
- Tax Residency Certificate and Form 10F where DTAA relief is claimed.
Want this handled for you?
Send your details and get a written scope, timeline and fee before any work starts.