What NRIs need to know about Income Tax

What NRIs need to know about Income Tax

Does NRIs have to pay income tax in India? The answer is ‘NO’. This is because NRIs already pays their share of income tax in the country they work.

What qualifies as an NRI?

The Income tax department classifies an individual to be a non-resident when:

  • You have been residing outside India for a period of 182 days or more during the relevant previous year
  • You haven’t been present in India for 60 days or more during the last year and a combined total of 365 days or more during the last 4 years


When do an NRI have to pay tax in India?

An NRI can be taxed in India only on the capital gains he had with the investment in India. So, for all the income he earned abroad he’s not liable to pay any tax on it because it doesn’t fall under Indian income tax acts but here are a few categories under which he’s liable to pay income in India:

Salary: Salary which is earned in India under or income generated by a business in liable to pay tax in India.

Property and Assets: Any income or capital gain that has been generated from the sale, rent or leasing of a valued property or an asset based in India will be taxed as per the Income Tax act.

Securities and Investments: Income or capital gains earned investments are also liable to be taxed.

Conditions for Income Tax:

You are qualified to pay taxes when:

  • The taxable income of the NRI in India during that financial year is more than 2.5 lakh INR, which is the new exempted limit
  • You must have earned capital gains from the sale of any investment or property, even if the gains are less than the exemption limit.

There are many agencies providing NRI services in India. These NRI services offer variety of legal services such as assistance and advisory services related to taxation, property investment, banking service, immigration and consultancy services.

  • Padmanabhan Pandurangan

    I came to US in oct14. Now I’m trying to file ITR for FY15-16. I have income from my rental house property and that too its less than 3L. So after 30% rebate and my 80c it becomes zero tax. Should I file ITR1 or ITR2. If its ITR2 should I declare my US income in schedule FSI? Should I fill schedule TR and FA? Please help…

  • Lina Babbar

    I have rented out a property recently; do I have to pay income tax?

    If the income generated from the rent is more is 3.25 lakh, then yes. Since, you get 30% rebate and also if you’re repaying home loan. You are eligible to get rebate but only if you’re first owner of the property.