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September 26, 2016

Incomes for Which NRIs are Liable to Pay Tax in India

NRIs are liable to pay taxes as well as enjoy rebates and deductions on the said taxes like any other Indian citizen as per Indian laws.


A person is said to be an NRI, if he/she is present in India for less than 60 days in the relevant financial year. Furthermore, if a person’s total stay in India is less than 182 days in the tax year and he resides outside India or has left the country for employment, he will be regarded as a non-resident.

As per the Indian laws, NRIs are liable to pay taxes like any other Indian citizen. They, similarly, have the right to claim deductions and rebates on such taxes provided under Section 80 of the Income Tax Act. Therefore, an NRI can claim tax deductions on charitable donations, student loans, etc.

However, an NRI is liable to pay taxes in India only on the income earned in the country and according to the tax bracket that they fall in. The income that is taxable for an NRI are as follows:

  • Salary received in India for services provided from/in the country.
  • Income from properties in India. These properties may be rented or lying vacant and tax will be applied according to the current rates. If the property is rented, the tenant has to deduct 30% TDS from the rent and then make the payment to the NRI.
  • Income from FDs and/or interest from Savings Account.
  • If a house property is sold, the capital gain from the same. The buyer has to deduct TDS at 20% for long term gain and 30% for short term gain.

An NRI is, however, not liable to pay taxes on income that he/she earns outside India.

Source : Huffington Post