NRI income tax in India: residency, taxable income and filing (2026)
Living abroad does not end your Indian tax obligations. Whether India can tax you depends on your residential status, and that is decided by days spent in India, not by your passport or visa.
By CA Abhishek Gupta · Updated 31 October 2026
Step 1: work out your residential status
Residential status is fixed separately for every tax year (1 April to 31 March). You are a resident if you meet either test below; otherwise you are a non-resident (NRI).
| Situation | You are resident if you spend in India… |
|---|---|
| Basic test (everyone) | 182 days or more in the year |
| Second test (general) | 60 days or more in the year and 365 days or more in the 4 preceding years |
| Indian citizen or PIO visiting India, Indian income up to ₹15 lakh | The 60-day limb becomes 182 days |
| Indian citizen or PIO visiting India, Indian income above ₹15 lakh | The 60-day limb becomes 120 days (and you are treated as RNOR) |
| Indian citizen leaving India for a job abroad, or crew of an Indian ship | Only the 182-day test applies |
Deemed resident: an Indian citizen whose Indian income exceeds ₹15 lakh and who is not liable to tax in any other country (by domicile or residence) is treated as resident, but not ordinarily resident (RNOR), whatever the day count. This mainly affects people in countries with no personal income tax, so a tax residency certificate from your country of residence is worth keeping.
RNOR (resident but not ordinarily resident) is a halfway status, often available for a few years after an NRI returns to India. An RNOR is taxed broadly like an NRI on foreign income.
Step 2: know what India can tax
An NRI pays Indian tax only on income that arises, accrues or is received in India. Foreign salary and foreign investment income are not taxed in India.
- Taxable in India: rent from Indian property, interest on NRO deposits, capital gains on Indian shares, mutual funds and property, dividends from Indian companies, and salary for work done in India.
- Exempt for NRIs: interest on NRE and FCNR deposits, as long as you remain non-resident under FEMA.
- No rebate: the section 87A rebate that makes income up to ₹12 lakh tax-free under the new regime is available only to residents. NRIs pay tax on income above the basic exemption limit.
Step 3: decide whether you must file an ITR
File a return if your Indian income exceeds the basic exemption limit, if you want a refund of excess TDS, or if you have capital gains or losses to report. Banks and buyers often deduct TDS from NRIs at high rates, so many NRIs file only to get money back.
You may not need to file if your only Indian income is investment income or long-term capital gains on which full tax has already been deducted at source. Check this before relying on it, because one extra item of income changes the answer.
The usual due date for individuals without a tax audit is 31 July after the end of the tax year, unless the government extends it.
What changed from 1 April 2026
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The residency tests above carry over, but some names changed:
| Old name | New name | Why an NRI cares |
|---|---|---|
| Previous year / assessment year | Tax year | One 12-month period, 1 April to 31 March |
| Form 16A | Form 131 | TDS certificate for rent, interest and fees |
| Form 26AS | Form 168 | Statement of tax deducted against your PAN |
| Form 15CA / 15CB | Form 145 / 146 | Needed when you send money abroad from India |
Returns for income earned up to 31 March 2026 still use the old forms.
Practical checklist for NRIs
- Count your days in India for the year from your passport stamps.
- Keep Indian income in an NRO account and foreign income in NRE or FCNR accounts.
- Update your bank, demat and mutual fund records to NRI status.
- Download Form 168 (old 26AS) and the annual information statement before filing.
- Keep your tax residency certificate from your country of residence, so you can claim treaty relief.
Questions people ask
How many days can an NRI stay in India without becoming resident?
Usually up to 181 days in a tax year. If you are an Indian citizen or PIO with Indian income above ₹15 lakh, staying 120 days or more can make you resident (RNOR) if you were in India for 365 days or more in the previous four years.
Is NRE account interest taxable in India?
No. Interest on NRE and FCNR deposits is exempt for a person who is non-resident under FEMA. Interest on NRO deposits is taxable.
Do NRIs get the ₹12 lakh tax-free limit?
No. The section 87A rebate that makes income up to ₹12 lakh tax-free under the new regime applies only to resident individuals.
Can I file my Indian ITR from abroad?
Yes. Returns are filed online and verified electronically, so an NRI can file from any country.
Sources
- NRI residential status rules
- Income-tax Act 2025 and NRI residency
- 2026 tax form renames for NRIs
- Income Tax Department: non-resident FAQs
General information, not advice. Rules change and individual facts matter; take professional advice before acting.