💰 Taxation Rules for NRIs: What is Taxable in India?

NRIs are only taxed on income earned or received in India, including:

✅ Salary received in India (if paid by an Indian employer)
✅ Rental income from property in India
✅ Interest earned on Indian bank accounts (except NRE accounts)
✅ Capital gains from investments in stocks, mutual funds, and property
✅ Business income if controlled from India

📌 Foreign Income (Salary, Business, Investments outside India) is NOT taxable for NRIs.

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📌 TDS (Tax Deducted at Source) for NRIs

NRIs are subject to TDS (Tax Deducted at Source) at higher rates than residents.

Type of Income	TDS Rate for NRIs
Salary	As per slab rates
Rental Income	30%
Fixed Deposit Interest (NRO)	30%
Mutual Funds (Debt)	LTCG - 20% with indexation
Mutual Funds (Equity)	LTCG above ₹1 lakh – 10%, STCG – 15%
Property Sale Proceeds	LTCG - 20%, STCG - 30%

📌 Tip: NRIs can claim refunds for excess TDS by filing an Income Tax Return (ITR) in India.

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🌍 DTAA (Double Taxation Avoidance Agreement) Benefits for NRIs

📌 What is DTAA?

DTAA ensures that NRIs do not pay tax twice on the same income in both India and their resident country. It allows:
1️ Tax Credit: If tax is paid in India, NRIs get credit in their country.
2️ Tax Exemption: Income is taxed only in one country.
3️ Reduced TDS Rates: NRIs pay lower tax rates under DTAA.

📌 Example:

• An NRI in the USA earns ₹5 lakh interest from an Indian NRO account.
• Normally, 30% TDS applies in India.
• Under the DTAA with the USA, TDS is reduced to 15%.

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📊 NRI Investment Taxation & Repatriation Rules

Tax-Free Investments for NRIs

✔️ NRE Fixed Deposits (Tax-free interest)
✔️ FCNR Deposits (Foreign currency deposits, tax-free)
✔️ Certain Government Bonds (No tax if held till maturity)

Taxable Investments for NRIs

Investment Type	Tax Implications
NRO Fixed Deposits	Taxed at 30%
Mutual Funds (Debt)	LTCG - 20% with indexation
Mutual Funds (Equity)	LTCG above ₹1 lakh – 10%, STCG – 15%
Property Sale	LTCG - 20%, STCG - 30%

📌 Pro Tip: Use NRE accounts for tax-free interest and easy repatriation.

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🆕 Recent Tax Amendments for NRIs

📌 1. Higher TCS on Foreign Remittances

• TCS increased to 20% for outward remittances exceeding ₹7 lakh under Liberalized Remittance Scheme (LRS).

📌 2. RNOR Benefits Extended

• NRIs returning to India can claim RNOR status for 3 years, allowing tax-free global income.

📌 3. Deemed Residency Rule

• Indian citizens earning ₹15 lakh+ in India and staying in tax-free countries may be deemed residents and taxed in India.

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🎯 Tax Planning Tips for NRIs

✔️ Track Your Stay in India to maintain NRI status.
✔️ Invest Smartly using NRE FDs, ELSS, Real Estate for tax-free returns.
✔️ Use DTAA Benefits to lower tax rates on Indian income.
✔️ File ITR in India if your Indian income exceeds ₹2.5 lakh.
✔️ Repatriate Wisely: Use NRE accounts for easy fund transfers.

📌 Smart Tax Planning Can Save You Lakhs!