vinujaglan.com · Founder's official site How to read section numbers: s.80C→s.123 means Section 80C of the Income-tax Act, 1961 is now Section 123 of the Income-tax Act, 2025 (in force from 1 April 2026). Returns for FY 2025-26 still use the old numbers; Tax Year 2026-27 onwards uses the new ones. Section Finder
Residential status
- Resident if in India for 182 days or more in the year, or 60 days in the year and 365 days in the four preceding years.
- For Indian citizens leaving for employment and for visiting citizens/PIOs, the 60-day rule becomes 182 days — but 120 days if Indian income exceeds ₹15 lakh.
- An Indian citizen with Indian income above ₹15 lakh who is not taxable in any other country is a deemed resident (RNOR).
- Status is decided year by year.
What is taxable for an NRI
| Income | Treatment |
|---|---|
| NRE account interest | Exempt |
| NRO account interest | Taxable; TDS 30% + surcharge/cess (or treaty rate) |
| Rent from Indian property | Taxable; tenant deducts TDS |
| Capital gains on Indian shares, MFs, property | Taxable; buyer deducts TDS |
| Salary for work done abroad | Not taxable in India |
TDS and how to reduce it
- Payments to NRIs fall under s.195→s.393 — the payer deducts at rates in force or the treaty rate.
- Apply for a lower/nil deduction certificate s.197→s.395 when actual tax will be lower than the TDS — common on property sales.
- To claim treaty rates, keep a Tax Residency Certificate and Form 10F (now Form 41).
- Foreign remittance from India needs Form 15CA (now 145), and in many cases a CA's Form 15CB (now 146).
Frequently asked questions
No. The Section 87A (now 156) rebate is only for residents. NRIs do get the basic exemption limit on normal income.
If Indian income exceeds the basic exemption limit, or to claim a refund of excess TDS (common on NRO interest and property sales), yes.
Yes, under the old regime — for life insurance, ELSS, tuition fees and home-loan principal — but not for PPF opened after becoming an NRI.
