—Guide
NRI Income Tax Return Filing: Residential Status, Taxable Income and TDS
A practical guide for NRIs filing Indian tax returns — confirming residential status, what Indian income is taxable, how TDS works on NRI income, and when a return is required.
Non-resident Indians often assume they don't need to deal with Indian tax. But rent, interest, capital gains and other Indian income are taxable, and TDS on NRI income is often higher than the actual tax. This guide explains the essentials. Returns for FY 2025-26 are filed under the Income-tax Act, 1961; the Income-tax Act, 2025 applies from tax year 2026-27 with the same core rules.
Step 1: Confirm Residential Status
Status is decided each financial year, based on days in India. Broadly, you're resident if you're in India for 182 days or more. There's also a 60-day test combined with 365 days over the previous four years, but for Indian citizens and persons of Indian origin visiting India, the 60 days is replaced by 182 days — or 120 days if Indian income exceeds ₹15 lakh, in which case you may be resident but not ordinarily resident (RNOR). Citizens with Indian income above ₹15 lakh who aren't taxable anywhere else can be deemed resident.
Step 2: Identify Taxable Indian Income
- Rent from Indian property, after a 30% standard deduction and property taxes.
- Interest on NRO accounts, deposits and bonds (NRE and FCNR interest is exempt while non-resident).
- Dividends from Indian companies and mutual funds.
- Capital gains on Indian shares, mutual funds and property.
- Income from a business or profession in India.
Step 3: Match TDS
Most payments to NRIs have TDS at high rates — often 30% or more on rent and interest, and capital gains rates on the full sale price of property. Check Form 26AS and the Annual Information Statement for all TDS.
When You Must File
- Indian income above the basic exemption limit.
- To claim a refund of excess TDS.
- Where you have capital gains to report.
- To carry forward losses.
Treaty Benefits
If the tax treaty with your country of residence gives a lower rate — for example, on interest or dividends — you can claim it with a Tax Residency Certificate and Form 10F.
Getting Help
Think Filing prepares NRI tax returns, claims refunds, and applies treaty benefits.