Being an NRI for tax purposes is about the number of days you spend in India, not your passport or visa. Once you are a non-resident, only income earned or received in India is taxable here.
How residential status is decided
You are generally resident in a year if you are in India for 182 days or more, or for 60 days or more in the year and 365 days or more in the four years before it. For Indian citizens and persons of Indian origin visiting India, the 60-day test is replaced by 182 days, or 120 days if Indian income exceeds ₹15 lakh. Special rules can make some Indian citizens deemed residents. Status is worked out each year from your travel dates.
What NRIs pay tax on
- Rent from property in India
- Interest on NRO deposits (NRE and FCNR interest is exempt for NRIs)
- Capital gains on Indian shares, mutual funds and property
- Dividends from Indian companies
- Salary for work done in India
TDS on property sales
When an NRI sells property, the buyer must deduct TDS on the capital gain at the rates for non-residents, and in practice often deducts on the full sale value. A lower deduction certificate from the department, applied for before the sale, limits TDS to the actual tax.
Treaty relief
India has tax treaties with most countries. If income is taxed in both countries, the treaty can reduce Indian tax or allow a credit abroad. You need a tax residency certificate from your country of residence and the prescribed form to claim it.
When you must file
File a return if your Indian income is above the basic exemption limit, if you want a refund of excess TDS, or if you have capital gains to report or losses to carry forward. Filing is fully online, and can be verified without visiting India.
This article is general information, not advice for your situation. Tax rules change, so speak to us before acting on it.