Claim audit · FY 2026-27
“Once you are an NRI, all Indian income is tax-free”
The condition that decides it
NRIs remain taxable on India-source income: NRO interest at 30%, rental income at 30%, and capital gains on Indian assets at 20%/30% with buyer-side TDS. Only foreign income falls outside the Indian net, and NRE/FCNR interest is tax-free.
What the department sees
HIGH
Data the Income-tax Department already receives automatically — the reel doesn't mention this part.
The real math
An NRI with ₹2,00,000 of NRO interest, ₹6,00,000 of rental income and a ₹5,00,000 capital gain on Indian shares in a year computes Indian tax as follows: NRO interest taxed at 30% with the bank's TDS of ₹60,000; rental income of ₹6,00,000 minus 30% standard deduction under section 24(a), which is ₹4,20,000, taxed at 30% for ₹1,26,000; and the equity gain taxed under 112A at 12.5% above the ₹1.25 lakh threshold, about ₹46,875. Total Indian tax is roughly ₹2,32,875 — none of it 'free'. The NRE account interest of ₹1,50,000 is genuinely tax-free, and the salary earned abroad is outside the Indian net, which is the only part of the reel that holds. The trap is generalising from those two exemptions to all Indian income; India-source income stays taxable, with higher NRI TDS rates and buyer-side withholding under section 195 on property sales. The higher NRI TDS rates — flat 30% on NRO interest with no exemption set-off — make the tax-free myth expensive in practice, because the tax is collected before the return is even filed. Only the foreign-income exclusion and NRE/FCNR interest are genuinely outside the Indian net.
Questions people actually ask
There's a right way to do this
Do I pay Indian tax after I leave India?
Sections: 5, 6, 195 · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims