Indian Income Tax & Return Filing Guide for NRIs

Learn how to determine your tax residency, compute taxable income, handle property-sale capital gains, and e-file returns from anywhere in the world.

Start Filing
Quick Facts
  • Financial year: 1 April – 31 March
  • Return filing deadline: 31 July (unless extended)
  • Use ITR-2 or ITR-3 depending on income type

Overview

NRIs must pay tax in India on income that is received or accrues in India—such as rent, capital gains, or interest. Global income is taxable only if you qualify as a resident in a given financial year.

Returns can be filed online through the government’s e-filing portal: incometax.gov.in.

Determining Residency Status

  • Resident if present in India ≥182 days during the financial year, or ≥60 days in that year and ≥365 days over the preceding 4 years.
  • Indian citizens leaving for employment abroad or ship crew enjoy an extended 182-day threshold.

Income Taxable in India for NRIs

Tax applies only to income earned or received in India, including:

  • Rental income from property in India
  • Capital gains on sale of Indian assets
  • Interest on NRO accounts or Indian deposits
  • Business or professional income sourced in India

Interest on NRE/FCNR deposits and income earned outside India are exempt if you qualify as NRI.

Selling Property in India & Remitting Funds Overseas

When an NRI sells property in India, the profit is subject to **Long-Term Capital Gains (LTCG) tax** if held for more than 24 months.

Tax Calculation
  • Tax rate: 20% plus surcharge and cess on indexed gains.
  • Buyer must deduct TDS @20% (plus surcharge/cess) on the sale consideration and deposit it with the Income Tax Department.
  • Exemptions: You may claim relief under Sections 54, 54EC, or 54F by reinvesting in another property or specified bonds within prescribed timelines.
Steps to Comply & Repatriate
1
Obtain a Lower/Nil TDS Certificate (Optional)

Apply to the Assessing Officer (via Form 13) before sale if you expect lower liability, so buyer deducts tax at the approved lower rate.

2
File Return & Pay Any Balance Tax

Report the sale in your ITR, claim exemptions, and pay any additional tax due after TDS credit.

3
Remit Funds Abroad

After paying taxes, you can repatriate sale proceeds through an NRO account using RBI’s Liberalised Remittance Scheme (LRS). Most banks provide outward remittance services:

Banks will require Form 15CA/15CB and proof of tax payment before processing.

Filing Your Tax Return Online

1
Gather Documents

Form 16/16A, bank statements, capital gains statements, and proof of deductions (80C, 80D, etc.).

2
Log in to the Income Tax e-Filing Portal

https://www.incometax.gov.in

3
Choose the Correct ITR Form

ITR-2 for most NRIs; ITR-3 if you have business/professional income.

4
Declare Income & Claim Deductions

Report Indian-sourced income, claim deductions, and provide foreign bank details if required.

5
Verify & Submit

E-verify using Aadhaar OTP (if available) or by mailing a signed ITR-V to CPC Bangalore within 30 days.

Double Tax Avoidance Agreement (DTAA)

India has DTAA treaties with many countries (e.g., USA, UK, Canada) to avoid double taxation. File Form 67 to claim foreign tax credit before filing your return.

Frequently Asked Questions

Yes, if Indian income exceeds ₹2.5 lakh or to claim a TDS refund.

Yes, you can e-verify via net banking, DSC, or by mailing the signed ITR-V.

Typically 20% on long-term and 30% on short-term capital gains plus surcharge and cess.

Use your NRO account and outward remittance service (e.g., SBI, Axis Bank, ICICI Bank) after submitting Form 15CA/15CB and proof of tax payment.
Disclaimer: This guide is for informational purposes only. Tax rates and regulations can change—consult a qualified tax professional before making financial decisions.
Back to top