Nri Tax — CA Guides & Articles

Gift tax in India sits on the recipient, not the giver — and for NRIs, the answer depends entirely on which direction money or assets move. Sending funds to close family in India (parents, siblings, spouse) is fully exempt under ITA 2025 Section 92, with no ceiling. Receiving Indian assets from a non-relative can trigger full slab-rate tax in your hands, a point the 2023 amendment made explicit for non-residents.

When an NRI parent dies in India, families assume a registered will transfers the property automatically — no court needed. It is one of the costliest estate misunderstandings. A will, probate, a succession certificate and a legal heir certificate are four different instruments, each for a different asset type, and confusing them freezes flats and locks demat accounts for years. This guide maps the right instrument to each asset — immovable property never needs a succession certificate; movable financial assets of an intestate person usually do — and covers the tax layer NRIs miss: inheritance is tax-free, but Section 195 TDS on a later sale and the USD 1 million repatriation cap are where heirs lose money.

Your relatives sold their flat and the buyer deducted just 1% TDS — so you assume the same applies to your inherited house. It does not. When an NRI sells ancestral property, the buyer deducts under Section 195 on the full sale price, not the gain. Here is the real law, the Form 128 certificate that fixes it, and the USD 1 million repatriation route under ITA 2025.

Most NRIs assume that opening an NRO account is enough to invest in any Indian mutual fund. That assumption is wrong. US and Canada-based NRIs are blocked by most major AMCs due to FATCA compliance requirements. Overseas fund-of-funds have halted fresh NRI investments. And the TDS regime for NRIs is harsher than for residents — up to 30 percent deducted at source on debt fund gains. Under ITA 2025, equity LTCG is taxed at 12.5 percent and STCG at 20 percent, with TDS deducted on every NRI redemption regardless of amount. This guide maps which fund categories NRIs can access, what FATCA self-certification requires, which bank account to use for full repatriation, and how to claim TDS refunds via Form 26AS (now Form 168 under ITA 2025).

A DTAA benefit is never automatic. NRIs who skip the Tax Residency Certificate get taxed at full domestic rates instead of the lower treaty rate. Here is what ITA 2025 and Sections 90(4)/90A(4) actually require, and how to get it right before the 31 July 2026 deadline.

Both India and your host country calling you a tax resident does not let you choose the lower-tax one. The DTAA Article 4(2) tie-breaker is a fixed cascade — permanent home, centre of vital interests, habitual abode, nationality, then MAP — that decides your treaty residence for you. Here is how it works under ITA 2025, with real NRI scenarios, the TRC and Form 10F you need, and the worldwide-income trap it prevents.