NRI · 6 min read
NRI Income Tax in India: Residential Status & What's Taxable (2026)
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-24
For Indians abroad, your residential status decides what India can tax. Getting it right keeps you compliant and avoids paying tax on income India can't touch. Here's how it works (and always confirm your facts with a CA).
1Are you an NRI? (residential status)
Residential status is decided each year by your days in India. Broadly, you're a non-resident if you're in India for less than 182 days in the year (with a 60-day/365-day-over-4-years test that, for Indian citizens leaving for employment, is relaxed). A separate 120-day rule can apply to Indian citizens with Indian income above a threshold. There is also an 'RNOR' (Resident but Not Ordinarily Resident) middle status that limits tax on foreign income for a few years. These tests are fact-specific — verify yours with a CA.
2What India taxes for an NRI
- Income earned or accrued in India: salary for services in India, rent from Indian property, capital gains on Indian assets, interest on NRO deposits.
- Foreign income (salary abroad, overseas investments) is generally NOT taxed in India for an NRI.
- Interest on NRE and FCNR accounts is exempt while you are an NRI.
3Filing your ITR
NRIs generally cannot use ITR-1; ITR-2 (or ITR-3 for business) is usual. You must file if you have taxable Indian income or want to claim a refund of TDS deducted. Reconcile your Form 26AS/AIS, and use a DTAA (next guide) to avoid being taxed twice.
Frequently asked questions
Does an NRI pay tax on foreign salary in India?
Generally no — an NRI is taxed only on income earned or accrued in India. Foreign salary is taxed by your country of residence. Confirm with a CA for your situation.
Which ITR form do NRIs file?
Usually ITR-2 (ITR-3 if you have business income). NRIs typically cannot use the simple ITR-1.
Is this a substitute for professional advice?
No. Residential status and taxability are fact-specific and change with law. Verify with a qualified Chartered Accountant before acting.
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India Law Simplified is an AI-assisted research & drafting tool, not a substitute for a licensed advocate or CA. Verify all figures and steps with a professional before acting. Statutory limits and fees change with each Finance Act / notification.