NRI Taxation
NRI residency: the 120-day rule and what it actually costs
Residency decides what India taxes. The rules changed in 2020 and the thresholds now depend on your Indian income, which…
Residential status decides everything
A non-resident is taxed in India only on income that accrues or is received here — Indian salary, rent from Indian property, interest on NRO deposits, capital gains on Indian assets. A resident is taxed on worldwide income. Status is a day-count test for the year, not a matter of citizenship or of holding an OCI card.
Accounts and TDS #
Interest on an NRE or FCNR deposit is exempt while you remain a non-resident; interest on an NRO account is taxable and tax is deducted at a high flat rate. Buyers of property from a non-resident must deduct tax at source on the sale consideration, not on the gain, so a lower-deduction certificate is often worth applying for before the sale.
Double taxation relief #
India's treaties allow either an exemption or a credit for tax paid abroad. Claiming treaty relief needs a Tax Residency Certificate from the other country and Form 10F, and the foreign tax credit is claimed in Form 67, which has to be filed before the return.
What you will need
- Passport pages showing entry and exit dates for the year
- Tax Residency Certificate from your country of residence
- Form 10F and the treaty article you rely on
- NRO and NRE account interest certificates
- Sale documents and the TDS certificate for any Indian property sold
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NRI Taxation
NRI residency: the 120-day rule and what it actually costs
Residency decides what India taxes. The rules changed in 2020 and the thresholds now depend on your Indian income, which…