Frequently Asked Questions
Which incomes of an NRI are taxable in India? ＋
NRIs are taxed in India only on income that accrues or arises in India. This includes salary for services rendered in India, rental income from Indian property, capital gains on Indian assets, interest from NRO accounts, and dividends from Indian companies.
What is the TDS rate on NRO account interest for NRIs? ＋
Interest on NRO (Non-Resident Ordinary) accounts is subject to TDS at 30% plus 4% cess = 31.2% flat. Unlike resident Indians, NRIs cannot claim slab benefits on NRO interest. NRE account interest is fully exempt from Indian income tax.
What is DTAA (Double Taxation Avoidance Agreement)? ＋
DTAA is a treaty between India and the NRI's country of residence that prevents the same income from being taxed twice. Under DTAA, NRIs may claim reduced tax rates or exemptions. The actual benefit depends on the specific treaty. Consult a CA for DTAA claim.
Can NRIs claim the basic exemption limit in India? ＋
Under the Income Tax Act, NRIs can claim the basic exemption limit (₹2.5L under old regime, ₹3L under new regime for below-60). However, TDS is deducted at flat rates on specific incomes before this. NRIs need to file ITR-2 to claim refunds if TDS exceeds actual tax liability.
Which ITR form should an NRI file? ＋
NRIs with only salary, rental income, capital gains, or other income (no business income) should file ITR-2. Include Schedule FSI for foreign income, Schedule TR for taxes paid abroad, and Schedule AL for foreign assets. Deadline is July 31 (or October 31 with audit).