NRI Tax Calculator — Discovery Notes

JTBD

“How much Indian tax do I owe as an NRI?”

NRI Definition (Section 6, Income Tax Act)

• NRI: Present in India for < 182 days in the financial year
• For Indian citizens/PIOs with Indian income > ₹15L: threshold is 120 days (become RNOR if 120-182)
• NRI taxed only on income earned/received/deemed to accrue in India
• Foreign income NOT taxable in India for NRIs
• Source: incometax.gov.in

NRI Account Types (RBI FEMA regulations)

NRE (Non-Resident External)

• Purpose: Deposit foreign earnings in India
• Interest: Tax-free in India (Section 10(4)(ii))
• Repatriation: Fully repatriable (principal + interest, no limit)
• Currency: INR
• Joint holding: Only with another NRI/PIO
• On return to India: Redesignated as resident savings account

NRO (Non-Resident Ordinary)

• Purpose: Manage Indian-sourced income (rent, dividends, pension, sale proceeds)
• Interest: Taxable at 30% + surcharge + cess
• TDS deducted at source by bank
• Repatriation: Up to USD 1 million per financial year (after tax certificates/CA certificate)
• Currency: INR
• Joint holding: Can hold jointly with resident Indian

FCNR (Foreign Currency Non-Resident)

• Purpose: Term deposits in foreign currency
• Currencies: USD, GBP, EUR, JPY, CAD, AUD
• Interest: Tax-free in India (Section 10(15)(iv)(fa))
• Repatriation: Fully repatriable
• No currency conversion risk (deposited and returned in same currency)
• Minimum tenure: 1 year, Maximum: 5 years

TDS Rates for NRI (Section 195, FY 2025-26)

Interest Income (NRO FD, NRO savings)

• Base TDS: 30%
• Surcharge: 10-37% depending on income level (typically 15% for ₹1Cr-₹2Cr)
• Cess: 4% Health & Education Cess
• Effective rate: ~31.2% to ~34.944%
• DTAA can reduce to 10-15% for treaty countries

Rental Income

• TDS under Section 195: 30% + surcharge + cess on gross rent
• Deducted by tenant (tenant must obtain TAN)
• NRI can claim 30% standard deduction + municipal tax + home loan interest
• Actual tax on net rental income may be much lower than TDS
• File ITR to claim refund of excess TDS

Capital Gains — Property

• LTCG (> 2 years): 12.5% without indexation (post Budget 2024, 23 Jul 2024+)
• Previously: 20% with indexation
• STCG (≤ 2 years): Slab rates (effectively 30% for most NRIs)
• TDS by buyer: 12.5% + surcharge + cess on LTCG; 30% on STCG (on full sale consideration)
• Buyer must obtain TAN and deposit TDS by 7th of next month

Capital Gains — Listed Securities

• LTCG (> 1 year): 12.5% on gains above ₹1.25 lakh
• STCG (≤ 1 year): 20%
• STT must be paid

Salary (India-sourced)

• Taxed at slab rates (new regime available)
• New regime: 0% up to ₹4L, 5% ₹4-8L, 10% ₹8-12L, 15% ₹12-16L, 20% ₹16-20L, 25% ₹20-24L, 30% above ₹24L
• Section 87A rebate NOT available to NRIs
• Standard deduction: ₹75,000 under new regime

DTAA (Double Taxation Avoidance Agreement)

What is DTAA?

• Treaty between India and another country to avoid taxing same income twice
• NRI can claim lower rate under DTAA or domestic law, whichever is more beneficial
• India has DTAAs with 100+ countries

DTAA Interest Income Rates (verified from taxguru.in, cleartax.in)

How to Claim DTAA Benefits

1. Obtain Tax Residency Certificate (TRC) from country of residence
2. File Form 10F with Indian tax authorities
3. Provide PAN card to Indian bank/payer
4. Self-declaration of NRI status
5. Bank/payer deducts TDS at DTAA rate (or domestic rate, whichever is lower)

Property Sale by NRI — Detailed

Budget 2024 Changes (effective 23 July 2024)

• LTCG rate reduced from 20% to 12.5%
• Indexation benefit removed for all transfers on/after 23 Jul 2024
• Holding period for long-term: > 24 months (unchanged)
• For transfers BEFORE 23 Jul 2024: 20% with indexation still applies

Section 54 Exemption

• Reinvest LTCG in a new residential property in India
• Must purchase within 2 years OR construct within 3 years of sale
• If not reinvested by ITR filing date, deposit in Capital Gains Account Scheme (CGAS) in a scheduled bank
• Exemption = Capital gain OR cost of new house, whichever is lower
• Only ONE residential house (relaxed to TWO if LTCG ≤ ₹2 crore, once in lifetime)
• Lock-in: Must not sell new property within 3 years

Section 54EC Exemption

• Invest LTCG in specified bonds: NHAI or REC
• Maximum investment: ₹50 lakh per financial year
• Must invest within 6 months of date of sale
• Lock-in period: 5 years (previously 3 years)
• Interest on bonds: ~5-5.25% p.a. (taxable)
• Cannot be pledged or transferred during lock-in

Section 54F Exemption

• For LTCG on any asset OTHER than residential house
• Must reinvest NET SALE CONSIDERATION (not just gain) in residential property
• More beneficial for large gains on non-property assets

TDS Certificate (Section 197)

• NRI can apply for lower/nil TDS certificate if actual tax liability < TDS
• Apply to Assessing Officer before transaction
• Buyer deducts TDS at the rate specified in the certificate instead of statutory rate

Calculator Tabs

Tab 1: NRI Tax on Indian Income

• Inputs: Income type (FD interest/rental/capital gains/salary), Amount (₹5,00,000), DTAA country
• Outputs: Indian tax, TDS deducted, DTAA benefit, net tax, refund claimable
• Key insight: DTAA can save 50%+ on interest income tax

Tab 2: NRE vs NRO FD

• Inputs: Deposit amount (₹10,00,000), FD rate (7%), Tenure (1 year)
• Outputs: Side-by-side: interest earned, TDS, net returns, maturity value, effective yield
• Key insight: NRE FD yields 7% vs NRO effective 4.57% after 30% TDS

Tab 3: Property Sale by NRI

• Inputs: Purchase price, Sale price, Holding period, Section 54 reinvestment, Section 54EC bonds
• Outputs: Capital gain, LTCG/STCG, exemptions, tax, TDS by buyer, excess TDS refund, net proceeds
• Key insight: Section 54 + 54EC can eliminate tax completely; TDS often exceeds actual tax

Related Calculators

• /in/income-tax-calculator
• /in/capital-gains-tax-calculator
• /in/tds-calculator
• /in/fd-calculator
• /in/rental-income-tax-calculator
• /in/tds-on-property-calculator

Sources

• incometax.gov.in — Non-Resident Individual for AY 2025-26
• Finance Act 2025 (Section 115BAC, Section 195)
• Union Budget 2024 — LTCG rate change to 12.5%, indexation removal
• RBI Master Direction on NRE/NRO/FCNR accounts (FEMA)
• cleartax.in — NRI Income Tax, NRE vs NRO, DTAA rates
• taxguru.in — Countrywise DTAA withholding tax rates