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If you are a Non-Resident Indian with income sources in India — rental income, capital gains, interest, or a business — here is what you need to stay compliant in 2025.
Determining Residential Status
Your tax obligation in India hinges on your residential status under Section 6 of the Income Tax Act. The key test: were you in India for 182 days or more during the financial year? If yes, you are a Resident. If no, you are generally an NRI.
What Income is Taxable?
NRIs are taxed only on income that accrues or arises in India. This includes:
- Rental income from Indian property
- Capital gains on sale of Indian assets
- Interest on NRO accounts (NRE interest is exempt)
- Business income from operations in India
DTAA Benefits
If your country of residence has a Double Tax Avoidance Agreement with India (most major economies do), you can claim relief to avoid being taxed twice on the same income. The relief can be either an exemption or a tax credit.
Filing Requirements
NRIs must file an ITR if their India-sourced income exceeds the basic exemption limit. Unlike residents, NRIs cannot claim certain deductions (like 80TTA interest deduction) but can claim 80C investments made in India.
Our recommendation: Don't let FEMA and income tax compliance pile up. A single year of missed compliance creates compounding penalties.