What are Income Tax Rules for NRI?

What are the NRI Indian Income Tax Rules?

• The tax liability of an individual in India is determined based on their residential status. An individual is considered an NRI if they qualify as per the residential status criteria defined in the Income Tax Act.
• NRIs are taxed in India on income earned or received in India. Income earned abroad is generally not taxable in India, except for certain types of income such as income from a business controlled in or a profession set up in India, income from any asset or source in India, or income deemed to accrue or arise in India.
• NRIs are subject to different tax rates compared to resident individuals. The tax rates applicable to NRIs depend on the type of income earned.
• NRIs are eligible for certain deductions and exemptions under the Income Tax Act, similar to residents. However, the availability and extent of these deductions and exemptions may vary for NRIs.
• Certain types of income earned by NRIs are subject to Tax Deducted at Source (TDS) in India. The rates of TDS may vary depending on the nature of income.
• India has entered into Double Taxation Avoidance Agreements (DTAA) with several countries to prevent double taxation of income earned by NRIs. Under DTAA, NRIs may be eligible for relief from double taxation by way of tax credits or exemptions.
• NRIs may have certain reporting requirements, such as filing income tax returns in India if their total income exceeds the basic exemption limit or if they have certain types of income, even if no tax is payable.
• NRIs have specific rules regarding investments in India, including restrictions on certain types of investments and repatriation of income and proceeds from investments abroad.