Taxation for NRIs

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Insights of taxation for NRIs

Charges must be gathered from the Indian nation to support the country's monetary condition or development of the country for collecting the taxation for NRIs. To decide the tax collection sum according to the Income Tax Act, 1961 to access the NRI tax assessment applies to the people who acquire their pay outside the country wherein they are domiciled. Income tax rules and benefits for taxation for NRIs differ significantly from those for resident Indian's NRI tax rules. Non-resident Indians apply different income tax rules than resident Indians. Taxation for NRIs is applicable to pay the income tax on all income and profits earned in India. Income tax for non-resident Indians can vary compared to the income tax for resident Indians who are residing in India. The most important thing to comprehend is that NRIs must pay income tax on capital gains or earnings earned in India. We will be here to help you deal with the taxation for NRIs with our group of specialists in the tax refund advisory team to ensure compliance assurance. Also, we have a team of experts to deal with NRI tax rules and executives to ensure your income conforms to the legal norms of your country under NRI tax rules.

Who is considered a Non-resident Indian?

Any who is originally from India but now resides abroad with the legal status of an Indian citizen is known as a Non-Resident Indian (NRI) to calculate the taxation for NRIs. The reason behind this is that they have relocated overseas; they are known as NRIs or Overseas Indians. Any person who is a non-occupant can be any individual who has not lived or remained in India for a specific measure of time and find out whether a resident of Indian plunge is an occupant Indian or a non-inhabitant Indian according to the Foreign Exchange Management Act has laid out exact rules for taxation for NRIs. A person's private status in a specific year lays out whether the individual is viewed as an occupant for that year for the NRI tax rules.

Determinant for checking the residential status of NRI

The determinant factors for checking the residential status for NRI to calculate the taxation for NRIs have been bifurcated into two parts to determine when any individual is considered an Indian resident:

  • For any individual whose total income exceeds the amount of 15 Lakh INR in a fiscal year and who has stayed for more than 120 days in that same fiscal year.
  • Any non-resident Indian (NRI) is an Indian national who earns more than 15 lakh rupees (excluding foreign income) and is not taxed in any other country.

Filing of taxation for NRIs

For any individual who has filed taxation for NRIs, which are subject to income tax on income received or earned in India. Non-profit institutions are also required to pay income tax on income they perceive to be earned in or from India. Money received or assumed to be received in India is taxed. We came up with various factors on which the filing of taxation for NRIs presumed to be done by our teams of experts in the field of taxation for NRIs rules specialists as well as tax advisors to provide you with the best services for a flawless tax filing process for the NRI tax rules as laid down below

Determining the residential status

The first step is determining the individual’s residential status for taxation for NRIs. This needs to be determined for a particular tax year. But if you have recently moved abroad, it is a bit more complex. The same applies if you have returned to India. Your residence status is determined under Section 6 of the ITA 1961. The number of days you stay in India is very important. An NRI needs to spend 182 days abroad. Otherwise, you are considered a resident.

Determine the taxable income amount

You also need to figure out your taxable income. First, we need to understand the concept of TGR to determine the taxation for NRIs. TGR stands for total earnings before tax. If your total gross income is more than 2.5 Lakhs INR, then you will have to pay tax in India. The money may come or be received from several sources. It could be a raise in salary. It could be capital gains from selling stocks and mutual funds. The bracket may also include interest on Non-Resident Income (NRO) deposits and rental income. Non-resident Indians can also benefit from tax treaties. For example, if you deduct 195 TDS from your income, you can also claim a tax refund. To do this, you need to balance the TDS credit with advance tax, as shown in Form 26AS.

Determine tax obligations

However, you need to file returns for both of the above to determine the taxation for NRIs. Gross income is irrelevant. Non-resident Indians (NRIs) can claim a tax deduction up to Rs 1,5 lakhs under section 80c of the ITA based on NRI income tax bracket rates, and they are not allowed to invest in certain securities, including the PFF. If you earn more than Rs 50 lakhs in India, you need to declare your assets and liabilities.

Ascertain the double taxation treaty

To determine the taxation for NRIs and the taxation rules as per the DTAA, The DTAA lets an NRI avoid paying tax twice on the same income. Under the new DTAA, your income may be tax deductible in one country or taxed at a lower rate in your home country. Suppose you have already paid tax in India. Then, you can file a tax credit claim in your country. The tax credit is available on the income tax you paid.

Check the income tax returns

After filing the income tax returns as per the NRI tax rules, the individual has to verify it within 120 days, and any action taken taker later on or after the due date is not valid to file taxation for NRIs.

Taxable income for NRIs

According to the FMEA and the ITA Act 1961, as per the NRI tax rules, an NRI can pay taxes in the following ways. In India, the taxable income of an NRI in a tax year exceeds the exemption limit of Rs. 2 lakh INR, and capital gains for any NRI can make capital gains by selling any property, both long-term and short-term, to calculate the taxation for NRIs. We at Enterslice have listed certain components on which the taxable income for the NRIs can be calculated, as mentioned below for better insights

Income tax on house property

The income generated for taxation for NRIs from the house will be taxed at the prevailing rates. Capital gains generated from the rental, sale, or lease of the asset in India are taxed based on income tax laws. An NRI can avail himself of a 30 per cent discount on his home loan in India if he is a resident of India. NRIs can avail of a deduction on the principal repayment, on the registration fees, and the stamp duty under section 80C. If the renter pays the rent to the owner of the property, who is a resident of India, the owner may avail of a deduction of 30 per cent and file a Form 15CA.

Counted on salary

An NRI is liable to tax on any income earned in India or received on the NRI’s behalf. In simple terms, an NRI who earns a wage in India for services rendered is liable for taxation for NRIs.


Short-term and long-term capital gains and securities income are taxed. Securities income is taxed if the gains are realized on shares that are held in India. In India, capital gains are taxed on asset transfer.

The third source of income

There are various other sources of income for taxation of NRIs (National Residents in India) are taxed on the interest earned on their savings bank account and fixed deposits.

Investments for TDS calculation

Non-resident Indians (NRIs) are taxed at 20% on investment income for the taxation for NRIs. An NRI investing in assets in India is taxed at 20%. However, an NRI who has deducted TDS from the invested income does not need to file returns based on the securities issued by the central government, the shares in the Indian corporations, and also the debentures deposits for the publicly listed companies.

Benefits of taxation for NRIs with us

As a consulting firm, we at Enterslice will provide you with the best legal, finance, and taxation services to a wide range of clients, including NRIs. Taxation for NRIs can be a complex area for NRIs, as it involves dual tax liability, DTAA benefits, and much more. Working with a firm such as Enterslice to manage taxation can offer several advantages for NRIs:

Taxation for NRIs expertise

As a financial and legal consultancy firm that calculates the taxation for NRIs, we are acquainted with our expert procedure related to the nuances of the taxation landscape of NRIs. This knowledge helps NRIs to follow strict tax legislation, thus avoiding the legal risks and penalties associated with non-compliance.

Avoidance of double taxation

It can be considered as one of the major concerns for non-resident Indians is that they can also be implicated in double taxation in India and their home country to calculate the taxation for NRIs. By understanding the intricacies of direct taxation assistance between India and also for the rest of the world, we can ensure that NRIs can claim relief and legally avoid double taxation.

Tax planning

The tax planning for the taxation of NRIs plays a very significant role NRIs use effective tax planning to calculate the taxation for NRIs. This will help NRIs to make the most out of their money and investments. Enterslice provides customized tax advice, including investing in NRI-compliant financial instruments, as well as estate planning that is in line with both domestic and foreign tax obligations.

Regulatory and compliance advice

We will also help to keep you updated about the regulatory compliances in dealing with the taxation for NRIs with the ever-changing tax legislation and rules. Enterslice is well-versed in these changes and provides NRIs with guidance on how to comply, including filing taxes in India, declaration of overseas income, and more.


Taxation for NRIs can be done through managing taxation and compliance in India, which can be a difficult task for NRIs living abroad. We will also help in managing your taxation for NRIs and their Indian tax and financial matters from anywhere in the world. In conclusion, using the services as a professional will help you to manage your taxation for NRIs, not only helps you to stay compliant with the Indian tax laws but also helps you to optimize your tax liabilities, ensure effective tax planning, and provide you with peace of mind by efficiently managing all your regulatory and compliance matters.

Tax exemptions for taxation for NRIs

These are the tax exemptions for the taxation of NRIs to meet the eligibility criteria as per the NRI taxation rules are laid down below

  • Interests from NRE/FCNR accounts.
  • Also, interest from the national savings certificates should be notified, and the bonds issued by the government should be notified.
  • Long-term capital gains to the extent of the amount of 1 Lakh INR from the listed equity shares and also equity-oriented mutual funds.
  • These are the following sections below and conditions for the capital gains that come under tax exemption

Section 54: If any individual has been holding the house property for the taxation for NRIs which is for more than three years and then selling it, the proceeds should be used to buy or build another house property during that period. The exemption would be based on an investment of receipts.

Section 54F: For capital gains for taxation for NRIs resulting from the sale of non-residential property, the exemption applies to the construction or acquisition of a new home in proportion to the sale price paid for the new asset.

Section 54EC:This particular section also allows exemption for long-term capital gains invested in long-term bonds issued by government bodies such as the National Highways Authority of India and Rural Electrification Corporation within 6 months. Exemption can be claimed for the total amount of capital gains or up to INR 50 Lakhs whichever is less in a given financial year. The investment cannot be transferred until the end of three years.

Taxation for NRIs tax returns

There are certain return amounts for non-resident Indians (NRIs) that are different from resident Indians' tax returns. We will also help Non-resident Indians file their tax returns electronically for taxation for NRIs. The last date to file income tax returns for the taxation of NRIs can be 31st July of that particular assessment year through visiting the Income Tax Act portal. Here are some things to keep in mind when filing the returns for taxation for NRIs, as an NRI does not necessarily pay taxes for certain investment incomes and long-term capital gains for which TDS has been deducted. If the TDS incurred turns out to be higher than the tax liability of the individual, the NRI can seek a tax refund or claim an exemption. For this, filing tax returns is required for the NRI tax rules.

Here is the list of the NRI who are eligible to file income tax returns in the following cases laid down below

  • If taxable income is more than the exemption limit
  • Whenever any NRI who wants to claim a refund of tax paid
  • For an NRI who is facing loss in any form of transaction related to the investment or asset in India and also wants to carry forward it to the next fiscal year,
  • Whenever any NRI incurs long-term or short-term gain on the sale of the investment,

Here is the list of the NRI who are not required to file income tax returns

  • If the total income related to the fiscal year consists of an investment of income and tax deducted from the source.
  • If it is observed that the tax has been deducted from the source,
  • For any special investment in the income can be the only income of the taxation for NRIs in the related financial year and also the TDS has been deducted for it.

Avoidance of double taxation for taxation for NRIs

For any particular NRIs, their taxable income can be used to calculate the taxation for NRIs in India, which can be the income gained or received by the non-resident individual based on the income that can be taxed in India. The reason behind this form of transaction in India is that it becomes a source state of income by acquiring the right to levy tax on it. In this type of case, the double taxation can be problematic. Double taxation of income occurs when there are two jurisdictions under whose jurisdiction the income is subject to taxation. If the revenue is subject to taxation in both jurisdictions, it would impose an unfair burden on the non-resident person for NRI tax rules.

We will help you to avoid double taxation for NRIs through various factors figured out by our experts in the field of the NRI taxation system based on two methods as laid down below

Exemption method

This method allows the non-resident to be taxed only in the country in which he wishes to reside and is not taxed on the income in question in the other country.

Tax credit method

If income is taxed in two states at the same time, then tax credits are available in the state in which the domiciled non-resident Indian to calculate the taxation for NRIs.

Frequently Asked Questions

There are new rules for the taxation of NRIs, which are based on income. It does not depend upon gender, age, or other specifications of the individual. The income earned by the NRIs has to be charged irrespective of the threshold value for the TDS. There are nominal deductions that do not apply to the investment income and also under specific situations.

The DTAA has already discussed this issue with the multiple countries that are aiming to provide relief to the NRIs, PIOs, or OCIs for the double taxation.

Yes, it is compulsory to file taxation for NRIs if their total income increases the basic exemption limit set by the government. Some specific rules are also applicable to their income sources and residential status.

As per the FEMA rules and regulations, there are no penalties for not declaring your NRI status for which the individual either closes your existing savings accounts or converts them to non-resident ordinary savings accounts.

Any such income made by the NRI from any business controlled or established in In-dia should be taxed.

There are certain ways for the NRIs without linking the PAN to avoid higher paying of the tax deducted at the source by opening specific bank accounts, also through in-vesting in mutual funds.

There is, as such, no threshold limit mentioned under Section 195 of the Income Tax Act,1962, and also TDS for any amount will be deducted as per the payment of a for-eign company or NRI.

There are certain basic exemptions for 3 lakh INR, and 5 lakh INR can be available only to senior resident citizens under the old tax regime. For any NRI, it can be no-ticed that when your income as a senior citizen exceeds the amount of 2.5 lakh INR,

Any income that is earned by the NRI in the form of interest on the fixed deposit and savings bank account shall be taxable in India.

The consequences of not filing income tax returns as NRI will attract penalties also, interest charges, and legal consequences. NRIS needs to comply with the tax regula-tions and norms to avoid such issues.

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