Are you an NRI confused about income tax in India? Don’t worry. Whether you live in Dubai, USA, UK, Canada, or anywhere else, this simple guide will help you understand save tax and how Indian income tax rules apply to you in Assessment Year 2025–26.
We’ll explain the important Income Tax sections that matter to NRIs – in plain and practical language.
Table of Contents
Who is an NRI as per Income Tax Act?
As per Section 6 of the Income Tax Act, your residency status decides your tax rules in India.
You are treated as an NRI if:
- You stayed in India for less than 182 days during the Financial Year (April 2024 – March 2025),
OR - You stayed in India for less than 60 days in FY 2024–25 and less than 365 days in the last 4 years
Always check how many days you stayed in India every year. This small detail changes your tax status.
Section 10(4) – No Tax on NRE Interest
If you earn interest from your NRE account, it is not taxable in India.
This is allowed under Section 10(4). The money must come from abroad and the account must be in your name as an NRI.
Section 10(15)(iv)(fa) – No Tax on FCNR Interest
If you have an FCNR deposit (in foreign currency like USD, GBP, EUR), then interest earned is also tax-free in India.
This benefit is given under Section 10(15)(iv)(fa).
Section 115D – Investment Income Rules for NRIs
If you invest in Indian shares, debentures, or deposits (in foreign currency), then Section 115D applies.
Your income is taxed at special rates and no deductions like 80C or 80D are allowed (except in some cases).
Section 115E – Flat 20% Tax on Investment Income
This section gives you an easy option – pay flat 20% tax on income from certain foreign investments in India.
You don’t need to worry about slab rates.
Section 115F – Save Tax on Capital Gains
If you sell a foreign exchange asset (like Indian shares bought in foreign currency) and reinvest the money in certain Indian assets, you can save tax on capital gains under Section 115F.
It’s like reinvesting to save tax – just like you do under Section 54 for house property.
Section 115G – No Need to File ITR (In Some Cases)
If your only income in India is from interest or capital gains and full TDS has already been deducted, then under Section 115G, you don’t need to file ITR.
But if you want to claim refund or DTAA benefit, better to file.
Section 115H – Continue NRI Benefits After Returning to India
If you return to India and become a resident again, you can still enjoy NRI tax benefits on your past investments by choosing the option under Section 115H.
Section 115I – Choose Regular Tax Slabs Instead of NRI Rules
If you think regular tax slabs are better for you (e.g., income under ₹2.5 lakh or you have deductions), you can choose to not follow NRI special tax under Section 115I.
It’s your choice.
Section 195 – TDS Must Be Deducted on Payments to NRIs
When you sell a house in India, or receive rent, or any payment as an NRI – the person paying you must deduct TDS under Section 195.
For property sale, TDS is 20% to 30%. But you can apply for a lower TDS certificate using Form 13.
Section 90 / 90A – DTAA Benefits (To Avoid Double Tax)
India has DTAA (Double Tax Avoidance Agreements) with more than 90 countries like USA, UK, UAE, Canada, Australia.
With DTAA, you can avoid paying tax twice – in India and abroad – on the same income.
To claim DTAA benefit, you need:
- Tax Residency Certificate (TRC) from your country
- Form 10F
- A simple declaration
Section 139(1) – Who Should File Income Tax Return?
If your total Indian income is more than ₹2.5 lakh, then you must file ITR under Section 139(1).
Even if your income is below ₹2.5 lakh but TDS is deducted – you should file to get a refund or carry forward losses.
Section 54 & 54F – Save Tax When Selling Property
If you sell a property in India, you may have to pay capital gains tax. But if you reinvest in another house in India, you can save tax under:
- Section 54 – if you sell a house and buy another house
- Section 54F – if you sell any capital asset and buy a house
You can also reduce TDS by applying for a Lower TDS Certificate before the sale.
Quick Table – NRI Income Tax Sections Made Simple
| Section | What It Covers |
|---|---|
| 6 | Who is an NRI – based on days in India |
| 10(4) | No tax on NRE interest |
| 10(15)(iv)(fa) | No tax on FCNR interest |
| 115D | Special tax on NRI investment income |
| 115E | Flat 20% tax on investment income |
| 115F | Save tax on capital gains if reinvested |
| 115G | No need to file ITR if only TDS income |
| 115H | Continue NRI benefits after returning to India |
| 115I | Option to go with normal tax slabs |
| 195 | TDS rules for NRIs (property, rent, interest) |
| 90 / 90A | DTAA to avoid double tax |
| 139(1) | ITR filing rule |
| 54 / 54F | Save tax on property sale |
Need Help with NRI Tax Filing?
At TaxGiveIndia.com, we make it easy for NRIs to file their taxes from anywhere in the world.
We help with:
- NRI ITR Filing (ITR-2, ITR-3)
- Capital Gains Calculation
- Lower TDS Certificate (Form 13)
- DTAA Documents (TRC, Form 10F)
- Maximum Tax Refund
WhatsApp Support | Fast Service
Final Words
Just because you live abroad doesn’t mean Indian tax rules don’t apply. If you earn rent, sell property, or have interest income in India, you must file your ITR and follow tax rules.
Let TaxGiveIndia.com take care of everything. We’re your trusted partner for NRI Income Tax Filing.