14 June, 2025 at 5:20 pm
If you are an NRI, then any income that you earn or accrue in India will be taxable in India. Also, any income earned outside India will not be taxable in India. If you are an NRI and you get your salary directly into an Indian account, then it will be taxed as per the Indian tax laws.
There is a DTAA agreement for NRIs, which is basically a Double Taxation Avoidance Agreement. So, if an NRI earns income in India, such income will be taxable in India. Also, the country where the NRI is a resident will have the right to tax such income because it is the NRI's residence state. This way, the NRI will have to pay tax twice on the same income. To avoid this situation, India has agreed to the DTAA with several countries, which will help the NRI in avoiding double taxation by allowing them to claim credit for foreign taxes that they pay while filing their return of income in their home country.
Being an NRI, if your income in India exceeds Rs 2.5 lakh, then you will be liable to file your return of income in India. You are supposed to pay taxes in India on income that is earned or received in India through salary, rent. capital gains, interest, etc. However, certain types of income, such as income from agriculture or specific investments like tax-free bonds, may be exempt from tax for NRIs.
Don't worry, guys, we are also allowed to claim various deductions and exemptions from our total income under Section 80C and under the Income Tax Act.
Remember, interest that you earn on an NRE account and FCNR account is tax-free, but any interest that you earn on an NRO account will be subject to taxation if you are an NRI.
NRI taxation will depend mainly on your residential status in the particular financial year, as per the Income Tax Act. So, if your status is NRI, then your income earned or accrued only in India is taxable in India. Any income earned outside India is not subject to taxes in India.
If an NRI earns income that is taxable in India, then they have to file an income tax return (ITR) in this country.
There is one thing called advance tax also for NRIs. So, if you are an NRI and your tax liability exceeds Rs 10,000 in a financial year, then you must pay an advance tax. Also. Under Section 234B and Section 234C, interest is applicable if you do not pay the advance tax.
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