Any questions or concern on Tax exposure related to, Double Taxation Avoidance Agreement (DTAA), Tax Residency Certificate (TRC), NRE, NRO, FCNR, sale of Property by NRI, foreign tax credit, Overseas citizen of India (OCI), Person of Indian Origin (PIO), ESOPs, RSUs, foreign assets under FEMA, Seafarers, Foreigners working, living in India
Tax provisions that every non-resident Indian or a foreigner living in India must aware in two parts.
'Non-resident Indian' is an individual who is a citizen of India or a person of Indian origin (PIO) and who is not a resident of India. The incidence of tax on any assessee depends upon his residential status. The residential status of an assessee must be ascertained with reference to each year.
An individual is said to be non-resident in India if taxpayer is not a resident in India and an individual is deemed to be resident in India in any previous year if taxpayer satisfies any of the following conditions:
Exceptions: The following categories of individuals will be treated as residents only if the period of their stay during the relevant previous year amounts to 182 days.
Refer Latest Tax Residency Calculator with the updated rules for AY 2023-24 (FY 2022-23).
A resident individual will be treated as resident and ordinarily resident in India during the year if taxpayer satisfies both the following conditions:
A resident individual who does not satisfy any of the above-mentioned conditions or satisfies only one of the above-mentioned conditions will be treated as Resident but Not Ordinarily Resident.
|Nature of income||Residential Status|
|ROR *||RNOR *||NRI *|
|Income which accrues or arises in India||Taxed||Taxed||Taxed|
|Income which is deemed to accrue or arise in India||Taxed||Taxed||Taxed|
|Income which is received in India||Taxed||Taxed||Taxed|
|Income which is deemed to be received in India||Taxed||Taxed||Taxed|
|Income accruing outside India from a business controlled from India or from a profession set up in India||Taxed||Taxed||Not taxed|
|Income other than above (i.e., income which has no relation with India)||Taxed||Not taxed||Not taxed|
(*) ROR means resident and ordinarily resident.
RNOR means resident but not ordinarily resident.
NRI means non-resident indian.
In case of non-resident, being a person engaged in business of banking any interest payable by the permanent establishment in India of such non-resident to the head- office or any permanent establishment or any other part of such non-resident outside India shall be deemed to accrue or arise in India.
Section 10 of the Income Tax Act exempts various incomes from tax in the hands of non-resident.
Example: Mr Frank, an Irish citizen but currently the resident of USA was appointed as a senior official of the US Embassy in India. He earned a remuneration of Rs 10 lakhs in the current FY. Such remuneration is exempt in the hands of Mr Frank in India
Tax on Long term Capital Gains arising to non-resident Individual
Deductions not allowed to NRIs
Your Legal nationality is different from your Tax Residence Status. Tax Residence status vary every financial year based on your stay (number of days & few other rules) in India.
Get to know your residential tax status ROR / RNOR / NRI or a Resident by visiting Residential Status Calculator or Contact us @
Considering the interest income in NRE / NRO Account, NRI can file their return in India. Income of NRE Account shall be exempt whereas, Income in NRO Account shall be taxable.
The treatment depends on the type of capital gain
The non-resident Indians (NRI) lives abroad but also earn an income in India. In this case, there is a possibility that the income arise in India would attract tax in India as well as in the country of the NRI’s residence. This means that taxpayer would have to pay tax twice on the same income. To avoid this twice payment of tax something called Double Tax Avoidance Agreement (DTAA).
The benefits of DTAA are lower withholding tax (tax deducted at source or TDS), exemption from tax, and credits for taxes paid on the doubly-taxed income that can be en-cashed at a later date.
India has DTAA with over 80 countries. The major countries with which it has signed the DTAA are the United States of America (USA), the United Kingdom (UK), the United Arab Emirates (UAE), Canada, Australia, Austria, Belgium, Colombia, Denmark, Finland, France, Germany, Hong Kong, Iceland, Ireland, Italy, Israel, Japan, Korea, Malaysia, Netherlands, New Zealand, Norway, Philippines, Poland, Qatar, Saudi Arabia, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Thailand to name a few.
DTAA is calculated in 2 ways:
Call, Chat, or drop an email to us Today to help you.
Vijay Krishna V
Oregon Health & Science University, USA