NRI Taxation in India — Residential Status, TDS, DTAA & Property Sale
Residential status decides everything
Your tax liability depends on whether you are a Resident, RNOR or Non-Resident for the year, based on the number of days you stay in India. An NRI is taxed only on Indian-source income (salary received here, rent, capital gains, interest on NRO accounts); foreign income is not taxed in India.
TDS — property sale & NRO income
When an NRI sells property in India, the buyer must deduct TDS at a higher rate on the sale value (you can apply for a lower-deduction certificate). Interest on NRO accounts and other Indian income also attracts TDS. NRE/FCNR interest is generally exempt.
DTAA, repatriation & filing
India's Double Taxation Avoidance Agreements (DTAA) let you avoid being taxed twice on the same income — claim relief with a Tax Residency Certificate. To repatriate funds abroad you generally file Form 15CA (and 15CB from a CA). File your ITR in India to claim TDS refunds and report Indian income.
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Guides on this topic
- Why Is My ITR Refund Delayed in 2026? (And How to Fix It)
- Tax Year vs Assessment Year — What Changed Under the Income Tax Act 2025
- ITR-1 vs ITR-2: Which Income Tax Return Form Should You File? (AY 2026-27)
- Old vs New Tax Regime (AY 2026-27): Which One Saves You More?
- TDS Explained Simply: On Rent, Salary & Professional Fees (India 2026)
- TDS vs TCS — What's the Difference? (India, Explained Simply)
- ITR: Original vs Belated vs Revised Return — What's the Difference?
- Which ITR Form Should You File for AY 2026-27? (ITR-1 to ITR-4)
- How to File ITR-1 (Sahaj) Online for AY 2026-27 — Step by Step
- Old vs New Tax Regime for AY 2026-27 — Which Saves You More?
- Documents Needed to File Your ITR (AY 2026-27) — Full Checklist
- Missed the ITR Deadline? Belated Return, Late Fee (234F) & Interest
Frequently asked questions
Is an NRI taxed on global income in India?
No. An NRI is taxed in India only on income earned or received in India (Indian salary, rent, capital gains, NRO interest). Foreign income is not taxed in India.
What TDS applies when an NRI sells property?
The buyer deducts TDS on the sale consideration at the NRI rate (higher than for residents). You can apply for a lower/nil-deduction certificate and claim any excess as a refund by filing your ITR.
Is NRE/FCNR interest taxable in India?
Interest on NRE and FCNR accounts is generally tax-free in India for an NRI, while NRO interest is taxable and subject to TDS. Verify with a CA for your status.
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General information, not professional advice. Rules change with each Finance Act / notification — verify with a licensed CA or advocate before acting.