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Taxability of Income for NRI’s

NON RESIDENT INDIAN- A Indian Citizen who stays out of India for employment/ carrying on business or vocation outside India or stays out of India under circumstances indicating an intention for an uncertain duration of stay out of India is a non-resident.
The following incomes are taxable for NRI’s-
  • Salary received in India or salary for service provided in India- Any Income from salary for your services are rendered in India will be considered to arise in India even you are NRI, but if your salary is paid towards services provided by you in India, it shall be taxed in India even you have received it out of India. In another case your employer is Government of India and you are the citizen of India, income from salary for your service is rendered outside India is also taxed in India.
  • Incomes from a house property situated in India- Any Income from house property situated in India shall be taxable in India, however, the assessee can claim standard deduction of 30% or property taxes paid if any, or can claim of an interest on home loan under income from house property. The assesse can also claim repayment of principal under section 80C. TDS shall be deducted @ 30% on rental income.
  • Capital gains on transfer of asset situated in India- Any capital gain on transfer of capital asset which is situated in India shall be taxable in India. Capital gains on investments in India in shares, securities shall also be taxable in India. TDS shall be deducted @ 20%, however the assessee can claim capital gains exemption by investing in a house property as per Section 54 or investing in capital gain bonds as per Section 54EC.
  • Interest on savings bank account/NRO account/fixed deposits- Interest income from saving accounts/NRO account and fixed deposits held at banks in India is taxable in India, while interest received from NRE or FCNR account is tax free.

These incomes are taxable for an NRI. Income which is earned outside India is not taxable in India.

Whether NRI has to file Income Tax Return or Not-

If Non Resident Indian has any income from India which is exceeding Rs. 2,50,000 during the year or if they have any refund of TDS, even his/her income is below Rs. 2,50,000.

Form of ITR to be filed-
ITR-2, is filed by NRI who does not have any income from business or professions in India or say NRI’s having Rental Income or Capital Gain or any other income except business income.
ITR-3, is filed by NRI who have also income from business or professions in India.



The Tax slabs for NRI's are same as for Resident tax payers, there is no change in slab rate.

An NRI can claim deduction under section 80C for investment in eligible schemes for NRI’s, but there are some exceptions in which an NRI’s can’t Invest the amount i.e. PPF Account (New), NSC or Senior citizens Saving Scheme.

See the related posts : TDS rate chart


Surya Goyal on 7/20/2021 4:47:07 AM says:
Here are some tips on How to file income tax by NRIs : https://bit.ly/3exfqZR
Surya Goyal on 7/20/2021 4:46:31 AM says:
Since I have gone through your blog and found it informative, here are some tips on How to file income tax by NRIs : htt
Surya Goyal on 7/20/2021 4:45:03 AM says:
Very delighted to come across this useful article. We must consider the facts that when filing ITR, NRIs must identify t

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