NRI Tax Filing & Residency Advisory

An individual's Indian tax residency, which determines the scope of income taxable in India, is governed by Section 6 of the Income-tax Act, 1961. A person is 'resident' in India for a financial year if they are present in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in aggregate across the preceding four financial years. A resident who does not meet the additional conditions for 'ordinarily resident' status qualifies as Resident but Not Ordinarily Resident (RNOR).

Two anti-avoidance provisions extend residency for certain individuals despite short physical presence in India. Under Section 6(1A), an Indian citizen with total India-sourced income exceeding ₹15 lakh in the financial year, who is not liable to tax in any other country by reason of domicile or residence, is deemed resident in India even without meeting the day-count tests. Separately, for Indian citizens or persons of Indian origin visiting India with India-sourced income exceeding ₹15 lakh, the ordinary 60-day threshold in the second limb above is relaxed to 120 days.

Where DTAA relief is claimed on foreign income or against Indian-sourced income taxed abroad, the taxpayer must furnish a Tax Residency Certificate (TRC) from the country of residence and Form 10F — mandatorily filed electronically on the income-tax portal from Assessment Year 2023-24 onward, per the Finance Act, 2023 amendment. Tax is deducted at source under Section 195 at the applicable DTAA rate where both TRC and Form 10F are on record with the payer; absent either, the higher of the domestic rate or the DTAA rate applies.

Our engagement covers residency determination, RNOR assessment, TRC/Form 10F coordination, and DTAA-compliant return filing.

NRI tax filing is the preparation and the filing of the Indian income tax returns for non-resident Indians under the Income-tax Act 1961 — the Indian-source income of the NRI (the rental income, the interest, the capital gains, the salary for the Indian services), the return filed in the ITR forms applicable to the non-residents, the TDS on the Indian income claimed back, and the reporting of the foreign assets in the Schedule FA where the NRI is a resident but ordinarily resident. The NRI's Indian tax is the tax on the Indian-source income, computed under the Act and reduced by the treaty relief where applicable.

The NRI's tax position is decided by the residency under Section 6 of the Act and the source of the income — the Indian rental and the interest are taxable in India, the foreign income of a non-resident is not, and the residency rules of Section 6 determine the boundary. The return is where the NRI claims the TDS back, reports the Indian income, and — for the resident but ordinarily resident — reports the foreign assets under the Schedule FA.

The cost of a mismanaged NRI return is the tax and the reporting exposure: the Indian income untaxed and the interest running, the TDS never claimed back, the foreign assets unreported and the consequences under the Act. The NRI's Indian tax is simple when it is filed properly and expensive when it is not.

This service is for NRIs with Indian income. We determine the residency under Section 6, compute the Indian-source income under the Act, claim the treaty relief and the TDS, prepare and file the return in the applicable ITR form, manage the foreign asset reporting in the Schedule FA where it applies, and handle the notices and the assessments so the NRI's Indian tax closes cleanly.