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Author: CA Kirti Goyal

  • Form 145 and Form 146 for NRIs in the UK — India-UK DTAA Guide 2026

    The United Kingdom has one of the largest Indian diaspora populations in the world — over 1.8 million people of Indian origin. Many UK-resident NRIs own property in India, hold NRO accounts, or receive rental income from Indian assets. If you are remitting money from India to your UK bank account, your Indian bank will require Form 145 and Form 146 (which replaced Form 15CA and Form 15CB from April 2026). This guide explains everything UK NRIs need to know.

    India-UK DTAA — Key Points for UK NRIs

    India and the UK have a comprehensive DTAA in force. Like the India-US treaty, it operates through a foreign tax credit mechanism — UK residents pay Indian tax on Indian income and claim credit in their UK self-assessment return. Key provisions include: capital gains on Indian immovable property are taxable in India; NRO interest income is taxable at a reduced rate under the DTAA; rental income from Indian property is taxable in India; all Indian taxes paid are creditable against UK income tax on the same income via HMRC’s foreign tax credit relief (FTCR).

    To claim India-UK DTAA benefits, UK residents must obtain a Tax Residency Certificate (TRC) from HMRC and file Form 10F electronically on the Indian Income Tax portal. The HMRC Certificate of Residence can be applied for via the HMRC online portal under “Get a certificate of residence”.

    What Changed for UK NRIs in April 2026

    From 1 April 2026, Form 15CA and Form 15CB no longer exist. They have been replaced by Form 145 (the online declaration, replacing Form 15CA) and Form 146 (the CA certificate, replacing Form 15CB) under the Income Tax Act 2025. If your HDFC NRI branch, ICICI Bank UK, or any other bank is asking for Form 15CB after April 2026, show them the Form 146 certificate — it is the legally valid replacement document.

    When Do UK NRIs Need Form 145 and Form 146?

    • Selling Indian property and remitting sale proceeds to a UK bank account
    • Remitting from an NRO account to a UK bank
    • Sending NRO fixed deposit proceeds to the UK
    • Repatriating rental income earned from Indian property
    • Any other Indian-source income being transferred abroad

    Lower TDS Certificate for UK NRIs Selling Indian Property

    UK NRIs selling Indian property face the same 20%+ TDS problem as all NRIs. A Lower TDS Certificate (Form 128) reduces TDS to the actual capital gain liability — typically saving ₹10–20 lakhs. Additionally, having a proper capital gains computation from the Form 128 process gives you clean documentation for your HMRC foreign tax credit claim. Starting ₹7,999.

    HMRC TRC — How to Obtain It

    Apply for a Certificate of Residence from HMRC at hmrc.gov.uk. You will need to specify the tax year, the country (India), and the relevant treaty provision. HMRC typically processes TRC applications within 15–30 working days. Apply well in advance of your remittance date. The TRC must cover the financial year in which the remittance is being made.

    Our Service for UK NRI Clients

    We handle Form 145, Form 146, Lower TDS Certificate (Form 128), NRI ITR filing, and Foreign Tax Credit (Form 44) for UK NRIs. Everything is done over email — no office visit required. We apply the India-UK DTAA provisions correctly in every Form 146 certificate, ensuring your UK foreign tax credit claim is well-documented.

    Email us at hello@nritaxca.com with your situation. We respond within 2 hours with a written fixed quote. Fixed pricing, no hidden charges.

  • Form 145 and Form 146 for NRIs in USA and Canada — India DTAA Guide 2026

    NRIs in the United States and Canada face a unique tax challenge: both the US and Canada have worldwide income taxation — meaning your Indian income may be taxable in both India and your country of residence. The India-US DTAA and India-Canada DTAA provide relief through foreign tax credits, but the process requires careful compliance on the Indian side, starting with Form 145 and Form 146. This guide explains what NRIs in the US and Canada need to know for 2026.

    India-USA DTAA — Key Points for NRIs

    India and the USA have a DTAA in force since 1990. Unlike the UAE DTAA, the India-US DTAA does not eliminate Indian tax — it prevents double taxation through the foreign tax credit mechanism. Income taxed in India (property sale gains, NRO interest, rental income) is eligible for a US foreign tax credit on your US federal return (Form 1040, Schedule A or Form 1116). Proper Indian compliance — including correctly issued Form 146 certificates with DTAA article references — ensures the IRS accepts your foreign tax credit without dispute.

    Key provisions: Indian-source capital gains from immovable property are taxable in India; NRO interest is taxable in India at a maximum 15% rate under Article 11 of the India-US DTAA (reduced from the standard 30%); rental income is taxable in India. All Indian taxes paid are creditable against US tax on the same income.

    India-Canada DTAA — Key Points for NRIs

    The India-Canada DTAA has been in force since 1996. Similar to the India-US treaty, it operates through a foreign tax credit mechanism. Capital gains on Indian property are taxable in India. NRO interest is taxable at a maximum 15% rate under Article 11. Rental income is taxable in India. Canadian residents claim a foreign tax credit on their T1 general return using Form T2209. Our Form 146 certificates include the relevant DTAA article references required for CRA compliance.

    How Form 145 and Form 146 Work for US/Canada NRIs

    The process is identical regardless of your country of residence — what changes is the DTAA treaty applied and the TRC you need to obtain. For US residents, the TRC is IRS Form 6166 (Certificate of US Tax Residency), obtained by filing Form 8802 with the IRS. For Canadian residents, the TRC is a letter from the CRA confirming Canadian tax residency, or CRA Form NR301. Both must be obtained before we can apply DTAA benefits in your Form 146 certificate.

    Lower TDS Certificate for US/Canada NRIs Selling Indian Property

    US and Canada NRIs selling Indian property face the same 20%+ TDS issue as all other NRIs. On a ₹1.5 crore property, that is ₹30+ lakhs deducted at registration. A Lower TDS Certificate (Form 128) reduces this to TDS on the actual capital gain — saving ₹15–25 lakhs in most cases. Additionally, the properly documented capital gains computation in the Form 128 application helps ensure the correct Indian tax figure is available for your US/Canada foreign tax credit claim. Starting ₹7,999.

    Documents Required for US/Canada NRIs

    • PAN card and passport
    • IRS Form 6166 (US TRC) or CRA residency confirmation letter (Canada TRC)
    • Form 10F filed electronically on the Indian IT portal
    • NRO bank account details
    • Property documents (for Form 128 / Lower TDS Certificate)

    Our Service

    We handle Form 145, Form 146, Lower TDS Certificate, NRI ITR filing, and Foreign Tax Credit (Form 44) for NRIs across the USA and Canada. Our team is experienced with both the India-US and India-Canada DTAA provisions. Everything is done over email — no office visits required anywhere.

    Email us at hello@nritaxca.com with a brief description of your situation. We respond within 2 hours with a fixed written quote.

  • Form 145 and Form 146 for NRIs in UAE and Gulf Countries — India-UAE DTAA Guide 2026

    The UAE, Saudi Arabia, Kuwait, Oman, Qatar, and Bahrain — collectively the GCC countries — are home to the largest concentration of Non-Resident Indians in the world. Millions of Indians working in the Gulf own property in India, hold NRO accounts, earn rental income, or are planning to sell Indian assets and remit the proceeds home to their Gulf bank accounts. This guide covers everything Gulf NRIs need to know about Form 145, Form 146, and the Lower TDS Certificate for 2026.

    What Changed in April 2026 for Gulf NRIs

    From 1 April 2026, under the Income Tax Act 2025, Form 15CA and Form 15CB have been replaced by Form 145 and Form 146. If you are remitting money from your NRO account or from property sale proceeds to your UAE, Saudi, or Kuwait bank account, your Indian bank now requires Form 145 (online declaration) and Form 146 (CA certificate) instead of the old forms. Banks that continue to accept Form 15CA/15CB after this date are operating under a transition grace period — the legally compliant documents are Form 145 and Form 146.

    India-UAE DTAA — What Gulf NRIs Need to Know

    India has a Double Taxation Avoidance Agreement (DTAA) with the UAE, effective since 1993. The India-UAE DTAA is particularly favourable for NRIs because the UAE levies no personal income tax — meaning Indian taxes paid on income like property sale gains or NRO interest can reduce your total tax burden to the Indian rate alone, with no additional UAE tax.

    Key DTAA provisions for Gulf NRIs: capital gains from sale of Indian immovable property are taxable only in India; interest income from NRO accounts is taxable in India (at 30% or the reduced DTAA rate on application); rental income from Indian property is taxable in India with a 30% standard deduction; and there is no UAE-side tax on Indian-source income for UAE residents.

    To claim DTAA benefits, Gulf NRIs must obtain a Tax Residency Certificate (TRC) from the UAE Federal Tax Authority (FTA) and file Form 10F electronically on the Indian Income Tax portal. We assist with both.

    UAE TRC — How to Obtain It

    The UAE Tax Residency Certificate is issued by the Federal Tax Authority (FTA) at tax.gov.ae. Requirements for individuals include: Emirates ID, valid UAE residence visa, bank statement or salary certificate confirming UAE residency, and proof of at least 183 days physical presence in the UAE in the relevant year. Processing typically takes 5–10 working days. This certificate is mandatory for DTAA benefits in Form 146. We include guidance on TRC application as part of our service.

    When Do Gulf NRIs Need Form 145 and Form 146?

    SituationForm 145Form 146
    Selling property in India and remitting to UAE accountYes — Part IIIYes
    Remitting from NRO account to UAE bankYes — Part IIIYes
    Sending NRO fixed deposit proceeds to UAEYes — Part IIIYes
    Rental income from Indian propertyYes — Part IIIYes
    NRE to foreign account (freely repatriable)Generally NoNo
    Small remittance below ₹5 lakh (non-taxable)Yes — Part INo

    Lower TDS Certificate for Gulf NRIs Selling Indian Property

    Gulf NRIs selling Indian property face the same 20%+ TDS on the full sale value as other NRIs. On a ₹1 crore property, that is ₹20 lakhs withheld at registration. A Lower TDS Certificate (Form 128) reduces TDS to the actual tax liability — typically saving ₹12–18 lakhs on a standard property sale. This is our most requested service from Gulf NRI clients.

    Apply at least 30 days before property registration. The Income Tax Officer typically processes applications within 15–30 days. Starting ₹7,999.

    Our Process for Gulf NRI Clients

    Everything is handled over email and WhatsApp — no office visit required. Gulf NRIs share documents via email, we review the case and send a fixed quote within 2 hours, and deliver Form 146 certificates within 24–48 hours of payment. We are familiar with the India-UAE, India-Saudi Arabia, and India-Kuwait DTAAs and apply the correct provisions in every Form 146 certificate.

    Pricing

    ServicePrice (INR)
    Form 145 + Form 146 CombinedStarting ₹4,999
    Lower TDS Certificate (Form 128)Starting ₹7,999
    NRI ITR FilingStarting ₹3,499

    Email us at hello@nritaxca.com or WhatsApp us. We respond within 2 hours with a written fixed quote.

  • How an NRI in Melbourne Saved ₹13.8 Lakhs on Property TDS — A Real Case Study

    Client details have been anonymised. Published with client permission.

    The Situation

    In January 2026, we were contacted by R.S., a software engineer living in Melbourne, Australia, who had inherited a flat in Pune from his father. The flat was purchased by his father in 2003 for ₹18 lakhs. R.S. had found a buyer willing to pay ₹95 lakhs.

    His buyer’s lawyer informed him that TDS would be deducted at 20% on the entire sale value — that is ₹19 lakhs withheld from his sale proceeds. R.S. would receive only ₹76 lakhs at registration and would need to wait months for a refund after filing an ITR.

    R.S. searched online, found our site, and emailed us asking if there was any way to reduce this TDS. Our response came within 2 hours.

    Our Assessment

    After reviewing the property details, we ran the capital gains computation:

    ItemAmount
    Sale value₹95,00,000
    Original purchase price (2003)₹18,00,000
    Indexed cost of acquisition (CII 2025-26)₹52,20,000
    Long-term capital gain₹42,80,000
    Tax at 12.5% (post removal of indexation, new regime)₹5,35,000
    TDS being demanded (20% on ₹95L)₹19,00,000
    Excess TDS vs actual tax₹13,65,000

    R.S.’s actual tax liability was approximately ₹5.35 lakhs — but without a Lower TDS Certificate, ₹19 lakhs would be deducted. That is ₹13.65 lakhs of excess deduction that would sit with the Income Tax Department for 12–18 months.

    We confirmed he was eligible for a Lower TDS Certificate (Form 128, erstwhile Form 13) under Section 395 of the Income Tax Act 2025.

    What We Did

    We sent R.S. a document checklist. He shared his PAN, passport, sale agreement, father’s original purchase deed, and his Australian Tax Residency Certificate from the ATO. We also assisted him with electronically filing Form 10F on the Indian Income Tax portal.

    Within 48 hours of receiving his documents, we prepared and filed the Form 128 application with the Jurisdictional Income Tax Officer in Pune, including a detailed capital gains computation, DTAA analysis under the India-Australia treaty, and a covering letter explaining the basis for the lower deduction request.

    The Income Tax Officer issued the Lower TDS Certificate within 22 days — instructing the buyer to deduct TDS only on the actual capital gain of ₹42.8 lakhs, at the applicable rate of 12.5%.

    The Result

    OutcomeWithout CertificateWith Certificate
    TDS deducted₹19,00,000₹5,35,000
    Amount received at registration₹76,00,000₹89,65,000
    Refund wait required12–18 monthsNone required
    Net savings—₹13,65,000

    R.S. received ₹89.65 lakhs at registration instead of ₹76 lakhs. He then remitted the proceeds to his ANZ Bank account in Melbourne using Form 145 and Form 146, which we also handled — with the DTAA provisions correctly applied so he could claim the Indian tax paid as a foreign tax credit in his Australian ITR.

    What R.S. Said

    “I had no idea I could reduce the TDS before the sale. My local accountant in Melbourne had no clue about Indian tax law. NRI Tax CA handled everything over email — I didn’t visit a single office. The certificate came through in 22 days and I saved over ₹13 lakhs. Worth every rupee of the fee.”

    — R.S., Melbourne, Australia (name changed for privacy)

    Key Lessons for NRIs Selling Indian Property

    1. Apply for the Lower TDS Certificate early — before signing the sale agreement. The process takes 15–30 days and cannot be done retroactively after registration.
    2. Your Australian accountant cannot help with Indian TDS — you need an ICAI-registered CA who specialises in NRI taxation.
    3. The India-Australia DTAA matters — correct DTAA application in Form 146 ensures you can claim the Indian tax as a foreign tax credit in Australia without disputes from the ATO.
    4. 100% online process — no office visits required anywhere. Everything was handled by email between Melbourne and our team.

    Our Service for NRI Property Sales

    We handle the complete NRI property sale compliance package: Lower TDS Certificate (Form 128), capital gains computation, Form 145 + Form 146 for repatriation, and NRI ITR filing. Each case is reviewed personally by our CA team — nothing is auto-generated.

    Email us at hello@nritaxca.com with your property details for a free eligibility check. We will confirm within 2 hours whether a Lower TDS Certificate applies to your situation and what it could save you.

    Use our free NRI Tax Calculator to instantly estimate your property TDS, refund amount and ITR obligation → Calculate Now

  • How to File ITR as NRI with Rental Income from India: Complete 2025-26 Guide

    Do you own a house or flat in India that you’ve rented out while living abroad? As an NRI, rental income from Indian property is fully taxable in India — and the tenant is legally required to deduct TDS before paying you rent. Understanding how to handle this correctly can save you significant money and keep you compliant with Indian tax law.

    At NRI Tax CA, we handle NRI rental income ITR filings every year. This comprehensive guide covers everything you need to know.

    Is NRI Rental Income Taxable in India?

    Yes, absolutely. Rental income from property situated in India is always taxable in India, regardless of your residential status. This applies whether you are NRI, RNOR, or full Resident. The property’s location — not your location — determines taxability.

    TDS on NRI Rental Income: The Tenant’s Obligation

    Here’s something many NRIs and their tenants don’t know: when a tenant pays rent to an NRI landlord, the tenant is legally required to deduct TDS at 30% (plus surcharge and cess) on the gross rent before paying. This is under Section 195 of the Income Tax Act.

    Why does this matter? If your tenant doesn’t deduct TDS, both the tenant and you could face penalties. The tenant also cannot claim the rent as a business expense without TDS compliance.

    The TDS rate for NRI rental income is typically 30% + 10% surcharge (if rent exceeds ₹50 lakh) + 4% health and education cess — making effective TDS up to 31.2% or higher on the gross rent.

    Can the TDS Rate Be Reduced?

    Yes — this is where significant planning opportunity exists. If your actual tax liability (after deductions) is lower than the TDS being deducted, you can apply for a Lower TDS Certificate under Section 197 (now filed via Form 128 / erstwhile Form 13). With this certificate, your tenant can deduct TDS at the lower rate specified by the Income Tax Department rather than the full 30%.

    This is especially valuable when you have loan interest deductions, standard deduction, or other allowable expenses that reduce your taxable rental income significantly. Rather than waiting to claim a refund after filing ITR, get the Lower TDS Certificate upfront.

    How Rental Income Is Computed for NRI ITR

    Rental income falls under the head “Income from House Property” in your ITR. Here’s how it’s calculated:

    Step 1: Gross Annual Value (GAV)

    The Gross Annual Value is typically the actual rent received or receivable, whichever is higher. If the property was vacant for some months, only the rent for the let-out period counts.

    Step 2: Deduct Municipal Taxes

    Municipal taxes (property tax) paid to the local authority are deductible from GAV to arrive at Net Annual Value (NAV).

    Step 3: Standard Deduction — 30%

    You get a flat 30% deduction on NAV as “standard deduction” under Section 24(a). This covers repairs, maintenance, and all property expenses. No receipts needed — it’s automatic.

    Step 4: Deduct Home Loan Interest (If Any)

    If you have a home loan on the rented property, the entire interest paid is deductible under Section 24(b) — with no upper limit for let-out property (unlike self-occupied property which has a ₹2 lakh cap). This can dramatically reduce taxable rental income.

    Taxable Income from House Property

    = GAV − Municipal Taxes − 30% Standard Deduction − Home Loan Interest

    This amount is added to your other India income (if any) and taxed at applicable slab rates.

    Worked Example: NRI Rental Income Tax Calculation

    Ananya lives in Dubai. She rents out her Mumbai flat for ₹40,000/month = ₹4,80,000/year.

    • Gross Annual Value (GAV): ₹4,80,000
    • Municipal taxes paid: ₹18,000
    • Net Annual Value (NAV): ₹4,62,000
    • Less 30% Standard Deduction: ₹1,38,600
    • Less Home Loan Interest: ₹1,80,000
    • Taxable House Property Income: ₹1,43,400

    If this is Ananya’s only India income, it falls in the 5% slab. Her tax = ~₹7,170 — far less than the TDS of ₹1,49,760 (31.2% of ₹4,80,000) her tenant deducted. She should definitely file ITR to claim the refund.

    Which ITR Form for NRI Rental Income?

    NRIs with rental income from India must file ITR-2 (if no business income) or ITR-3 (if business income also present). ITR-1 (Sahaj) is not available to NRIs.

    How to File NRI ITR with Rental Income: Step-by-Step

    1. Register on Income Tax e-Filing Portal (incometax.gov.in) with your PAN
    2. Link your PAN with Aadhaar (mandatory — may need OTP on Indian mobile)
    3. Collect TDS certificates: Ask your tenant for Form 16C (TDS certificate for rent) or check Form 26AS/AIS on the portal for auto-populated TDS credits
    4. Select ITR-2 and choose “Non-Resident” as residential status
    5. Fill Schedule HP (House Property) with rental income details, deductions
    6. Claim TDS credit from Form 26AS — this reduces your tax payable
    7. Verify and submit — e-verify using OTP (Indian mobile) or EVC or net banking

    Bank Account for Refund: Use NRO Account

    If you’re due a TDS refund (which is common given 30% TDS vs lower actual tax), you need an Indian NRO bank account linked to your PAN on the tax portal. Refunds are credited to Indian bank accounts only. NRE accounts cannot receive tax refunds directly.

    Reporting Rental Income in Your Country of Residence

    India taxes your rental income at source. Your country of residence may also require you to report this income. However, most countries have DTAA (Double Tax Avoidance Agreements) with India — so you can claim the Indian tax paid as a credit in your foreign tax return, avoiding double taxation.

    For example, if you live in the UK and paid ₹7,170 in India tax, you report the rental income in your UK Self-Assessment return but claim the India tax as a foreign tax credit, so you pay only the difference (if UK rate is higher).

    Penalties for Non-Filing

    NRIs often think that since TDS was deducted, they don’t need to file an ITR. This is incorrect. If your total India income (including rental income) exceeds the basic exemption limit (₹2.5 lakh under old regime or ₹3 lakh under new regime), you are required to file an ITR — even if TDS has been fully deducted.

    Penalties for non-filing include: late filing fee up to ₹5,000, interest on unpaid tax under Sections 234A/234B/234C, and potential scrutiny/notices from the Income Tax Department.

    Multiple Properties: Additional Rules

    If you own more than two properties, only up to two can be considered “self-occupied” (if not rented). All others are deemed to have a rental income even if vacant — this is called Annual Letting Value (ALV). For NRIs who own multiple Indian properties but live abroad, all properties are typically treated as let-out and annual value must be computed for each.

    Let NRI Tax CA Handle Your Rental Income ITR

    Filing ITR with rental income involves multiple schedules, TDS credit matching, and sometimes claiming refunds. We’ve helped hundreds of NRIs across USA, UAE, UK, Canada, and Singapore file accurate ITRs and claim maximum refunds.

    Our NRI ITR filing service starts at ₹3,499, with rental income included. We handle the full process — from collecting your TDS certificates to filing and e-verification support.

    Estimate your NRI rental income tax and TDS refund with our free NRI tax calculator. Our CA team at Bilash Paul & Associates can file your ITR-2 with rental income — enquire now.

    📞 WhatsApp us at +91 89309 63079 or use our contact form. Tell us your property rental amount and we’ll handle the rest.

  • RNOR Tax Benefits: How Returning NRIs Save Tax for Up to 3 Years After Coming Back to India

    RNOR Tax Benefits: How Returning NRIs Save Tax for Up to 3 Years After Coming Back to India

    Returning to India after years abroad? You may qualify for a special tax status called RNOR — Resident but Not Ordinarily Resident — that shields your foreign income from Indian tax for up to 3 years after your return. This is one of the most valuable and underutilised tax benefits available to returning NRIs.

    At NRI Tax CA, we help returning NRIs claim every benefit they’re entitled to. Here’s everything you need to know about RNOR status.

    What Is RNOR Status?

    RNOR stands for Resident but Not Ordinarily Resident. It is an intermediate residential status between NRI and full Resident (ROR — Resident and Ordinarily Resident). A person can be resident in India (satisfying Section 6(1) conditions) yet qualify as RNOR if they meet additional criteria under Section 6(6).

    Who Qualifies as RNOR? — Section 6(6) Conditions

    Under Section 6(6), a resident individual is classified as RNOR if they satisfy either of these conditions:

    1. They have been NRI in 9 out of the 10 financial years immediately preceding the relevant financial year, OR
    2. They have been in India for 729 days or fewer in the 7 financial years immediately preceding the relevant financial year.

    In simple terms: if you’ve lived abroad for most of the last 10 years, you almost certainly qualify as RNOR for the first 1–3 years after your return to India.

    RNOR Tax Benefits: What’s Not Taxable in India

    The biggest benefit of RNOR status is exemption from tax on foreign-sourced income. An RNOR is taxed in India only on:

    • Income earned or received in India
    • Income from a business or profession controlled from India

    NOT taxable in India for RNOR:

    • Foreign salary (even if received in India’s NRE account, if earned abroad)
    • Foreign business profits not controlled from India
    • Foreign capital gains (e.g., profits from selling overseas property or stocks)
    • Interest on NRE accounts (tax-free as long as RNOR status continues)
    • Interest on FCNR deposits (completely tax-free for NRI and RNOR)
    • Foreign pension income

    This is a massive advantage for returning NRIs who may have substantial investment portfolios, real estate, or business interests abroad.

    How Long Does RNOR Status Last?

    RNOR status is available for a maximum of 3 years after returning to India, though it could be shorter depending on your exact day count and NRI history. After 3 years of Indian residency (in most cases), you will transition to full Resident status (ROR) and your global income becomes taxable in India.

    This 3-year window is the ideal time to:

    • Restructure your foreign investments
    • Realise capital gains on foreign assets at a lower effective tax rate
    • Convert NRE fixed deposits to regular FDs before interest becomes taxable
    • Wind down foreign businesses or transfer management to local managers abroad

    NRE Account: What Happens When RNOR Becomes ROR?

    NRE accounts cannot be maintained once you become a full Resident (ROR). However, during RNOR status, interest on NRE accounts remains tax-free. Once you become ROR, the NRE account must be converted to a resident account and interest becomes taxable.

    Planning this conversion carefully — timing it with your RNOR-to-ROR transition — can save significant tax.

    RNOR vs NRI vs ROR: Quick Comparison Table

    StatusIndia Income Taxable?Foreign Income Taxable?NRE Interest Taxable?
    NRIYesNoNo
    RNORYesOnly if controlled from IndiaNo
    ROR (Full Resident)YesYes (Global Income)Yes

    Practical Example: Returning NRI — 3-Year RNOR Window

    Scenario: Deepa lived in the UK for 12 years and returned to India in October 2024. In FY 2024-25 she was in India for 180 days — she is NRI for that year. In FY 2025-26, she’s in India all year — she becomes Resident. But since she was NRI for more than 9 of the past 10 years, she qualifies as RNOR.

    Her UK rental income and UK pension are not taxable in India in FY 2025-26 due to RNOR status. She files her Indian ITR showing only India-sourced income. This saving could amount to ₹5–15 lakh or more depending on her foreign income level.

    Double Tax Avoidance Agreements (DTAA) and RNOR

    Even if some foreign income becomes taxable in India (e.g., business income controlled from India), India has DTAA agreements with 90+ countries. If you’ve already paid tax abroad on that income, you can claim credit in India to avoid double taxation. This is filed using Form 67 (new Form 44 as per Income Tax Act 2025) — the Foreign Tax Credit form.

    How to Claim RNOR Status in Your ITR

    RNOR status is claimed in your Indian Income Tax Return (ITR) by selecting the correct residential status. Use ITR-2 or ITR-3 depending on your income type. The form asks for your residential status — select “RNOR”.

    You do not need to separately apply for RNOR — it’s determined by the facts (day count + NRI history) and self-declared in your ITR.

    Common Mistakes Returning NRIs Make

    • Filing as full Resident (ROR) when they qualify as RNOR — resulting in unnecessary taxes on foreign income
    • Not maintaining day count records to prove RNOR eligibility
    • Forgetting to convert NRE accounts to resident accounts on time
    • Missing the RNOR window to restructure foreign assets before becoming ROR
    • Not claiming DTAA credit for foreign taxes paid

    Get Expert CA Help for Your RNOR Transition

    The RNOR window is time-limited and planning-intensive. At NRI Tax CA, our CA-assisted service helps returning NRIs correctly declare RNOR status, plan their foreign asset restructuring, and file ITR correctly — so you don’t pay a rupee more tax than you’re legally required to.

    Calculate your tax liability as an RNOR with our free NRI tax calculator India 2026-27. Ready to file ITR or claim RNOR benefits? Get expert CA help from Bilash Paul & Associates, Hisar.

    📞 WhatsApp us at +91 89309 63079 for a confidential consultation. We serve returning NRIs from UK, USA, UAE, Canada, Australia, Singapore, and all other countries.

  • NRI Status in India: How Residential Status is Determined Under Section 6 of the Income Tax Act

    Are you an Indian living abroad and unsure whether you qualify as an NRI for tax purposes? Or perhaps you’ve recently returned to India and don’t know how your tax status will change? Understanding residential status under Section 6 of the Income Tax Act, 1961 is the single most critical factor determining your tax obligations in India.

    At NRI Tax CA, we help NRIs and returning Indians navigate residential status determinations every year. This guide explains exactly how it works — in plain language.

    Why Residential Status Matters for Tax

    Your residential status determines what income India can tax:

    • Resident and Ordinarily Resident (ROR): Global income is taxable in India
    • Resident but Not Ordinarily Resident (RNOR): Only India-sourced income + business/profession income from outside controlled from India is taxable
    • Non-Resident (NRI): Only income earned or received in India is taxable

    Section 6 Explained: The Two Tests

    Section 6 of the Income Tax Act sets out two conditions to determine whether a person is “resident” in India for a given financial year (April 1 to March 31).

    Basic Condition (Section 6(1))

    A person is resident in India if they satisfy either of these conditions:

    1. They are in India for 182 days or more during the financial year, OR
    2. They are in India for 60 days or more during the financial year AND for 365 days or more in the 4 preceding financial years combined.

    Special exception: For Indian citizens who leave India for employment abroad (or as crew of an Indian ship), the 60-day threshold in condition 2 is replaced by 182 days. Similarly, for Indian citizens or Persons of Indian Origin (PIOs) visiting India, the threshold was extended — see the important amendment below.

    2020 Amendment: 120-Day Rule for High-Income NRIs

    The Finance Act 2020 amended Section 6 significantly. For Indian citizens or PIOs visiting India whose India-sourced income exceeds ₹15 lakh in a financial year, the 60-day threshold under condition 2 becomes 120 days (not 182 days).

    This means high-income NRIs who spend 120+ days in India AND have 365+ days in the preceding 4 years will be treated as resident (though potentially RNOR — see below).

    Deemed Resident Rule (Section 6(1A)) — Introduced in 2020

    A new “deemed resident” category was introduced: an Indian citizen who is not taxable in any other country due to domicile, residence, or similar criteria, AND whose India income exceeds ₹15 lakh, will be deemed to be resident in India — even if they spend zero days here.

    This was aimed at stateless individuals or those in zero-tax jurisdictions. If this applies to you, consult a CA immediately — the implications are significant.

    Who Qualifies as NRI?

    You are an NRI (Non-Resident Indian) for income tax purposes if you do NOT satisfy either of the basic conditions under Section 6(1). In practice, this means:

    • You stayed in India for less than 182 days during the financial year (for most NRIs living abroad year-round), OR
    • You stayed less than 60/120 days AND the 4-year look-back test is also not met.

    Note: NRI status under the Income Tax Act is different from NRI status under FEMA (Foreign Exchange Management Act). The IT Act test applies purely for income tax purposes.

    What Income Is Taxable for NRIs in India?

    As an NRI, only the following income is taxable in India:

    • Salary received or earned in India (e.g., for services rendered in India)
    • Rental income from property located in India
    • Capital gains from sale of assets in India (property, stocks, mutual funds)
    • Interest on NRO (Non-Resident Ordinary) accounts
    • Business income from operations in India

    Not taxable in India for NRIs: NRE account interest, FCNR account interest, salary earned and received abroad, foreign capital gains.

    Practical Day-Count: Common Scenarios

    Scenario 1 — Classic NRI: Rahul lives in the USA. He visits India for 45 days in FY 2025-26. He is NRI. Only India income taxable.

    Scenario 2 — Frequent Traveller: Priya visits India for 90 days every year. Over 4 years = 360 days. In FY 2025-26 she visits for 65 days. 65 > 60 AND 360 + 65 = 425 > 365. She becomes RESIDENT. If she just became resident, she may qualify as RNOR (see our RNOR guide).

    Scenario 3 — High Income NRI visiting India: Amit has ₹20 lakh India income and visits for 125 days. Under the 120-day rule, 125 > 120. Combined with 4-year look-back, he may be resident — potentially subject to global income tax. Urgent CA consultation needed.

    How to Count “Days in India”

    Days are counted as calendar days of physical presence in India. Both the day of arrival AND the day of departure are counted as days in India. Flight timings matter — if you land at 11:59 PM, that day still counts.

    Keep a record of all travel: passport stamps, boarding passes, immigration records. The Income Tax Department can verify day counts, and disputes are not uncommon.

    Which Financial Year and Assessment Year?

    Residential status is determined for each financial year separately (April 1 to March 31). The tax return for FY 2025-26 (Assessment Year 2026-27) must be filed by July 31, 2026, and your status for that year is determined by days spent in India between April 1, 2025 and March 31, 2026.

    Documents You Need for Residential Status Determination

    • Passport with all visa stamps and entry/exit records
    • Work visa / employment contract for the country you live in
    • Employer’s letter confirming overseas posting (if applicable)
    • Bank statements showing NRE/NRO accounts
    • Foreign tax returns or proof of tax residency abroad (if any)

    Need Help Determining Your Residential Status?

    An incorrect residential status determination can mean paying tax on global income when you shouldn’t — or missing required tax filings when you should. At NRI Tax CA, we review your day count, passport records, and income profile to give you a clear, CA-certified determination of your status.

    Unsure about your NRI status for the current year? Use our NRI tax calculator — it accounts for residential status automatically. For ITR filing or status determination, consult our CA team.

    📞 WhatsApp us at +91 89309 63079 or fill our contact form for a confidential consultation. We assist NRIs across USA, UAE, UK, Canada, Australia, Singapore, and more.

  • How to Claim Foreign Tax Credit in India — Form 44 (Form 67) Guide for NRIs 2026

    If you are an NRI who has returned to India and is now a resident, or if you are an RNOR earning income both in India and abroad, you may be paying tax in two countries on the same income. The solution is the Foreign Tax Credit (FTC) — a mechanism under India’s Double Tax Avoidance Agreements (DTAA) that allows you to offset taxes paid abroad against your Indian tax liability. Under the Income Tax Act 2025, this is claimed via Form 44 (previously Form 67).

    Who Can Claim Foreign Tax Credit?

    Foreign Tax Credit under Sections 90/91 of the Income Tax Act 2025 is available to:

    • Resident Indians (ROR) who earn foreign income — salary, business income, capital gains, interest — that is also taxable in India
    • RNOR (Resident but Not Ordinarily Resident) individuals in their transition years after returning from abroad
    • Individuals from countries with which India has a DTAA — USA, UK, UAE, Canada, Australia, Singapore, Germany, and 90+ other countries
    • Individuals from countries without DTAA who have paid tax there — FTC is available under Section 91 of the IT Act 2025 as unilateral relief

    What Changed: Form 67 Is Now Form 44

    Under the Income Tax Act 2025 (effective 1 April 2026), Form 67 has been renumbered as Form 44. The underlying process and purpose remain identical — you file a statement of foreign income and foreign taxes paid, and claim the credit against your Indian tax payable. If you search for “Form 67” online, it is the same as Form 44 under the new Act.

    At NRI Tax CA, we handle Form 44 / Form 67 filing as an add-on to ITR filing at ₹1,499 (ITR filing starts at ₹3,499).

    The Critical Deadline You Must Not Miss

    This is the most common and costly mistake: Form 44 must be filed on or before the due date of your ITR. If you file your ITR first and then try to file Form 44 later, your FTC claim will be rejected. The Income Tax Department has been strict about this sequencing, and courts have consistently held that late Form 44 filings do not qualify for the credit.

    For most individuals, the ITR due date is 31 July of the assessment year. For those with audit requirements, it is 31 October. File Form 44 before or on the same day as your ITR — not after.

    What Information You Need to File Form 44

    To file Form 44, you need the following documents from your foreign country of employment or residence:

    • Foreign tax return or assessment order showing the income declared and tax assessed
    • Proof of tax payment — tax paid certificate, withholding tax certificate, or bank statement showing tax deducted
    • Nature of income — salary, capital gains, business income, interest, etc.
    • DTAA Article under which the credit is being claimed
    • Exchange rate on the date of tax payment for conversion to INR

    You do not need to provide foreign documents to us directly — we will tell you exactly what to gather based on your specific country and income type.

    How the Credit Is Calculated

    The FTC you can claim is the lower of: (a) the foreign tax actually paid, or (b) the Indian tax payable on that same income. This prevents a situation where you claim more credit than your Indian tax liability on that income. The calculation is done income-category by income-category — foreign salary credit, foreign capital gains credit, etc. are computed separately.

    For example: If you earned ₹10 lakhs in salary from your US employer and paid ₹2.5 lakhs in US federal tax on it, and your Indian tax on the same ₹10 lakhs is ₹1.8 lakhs — your FTC is limited to ₹1.8 lakhs (the lower amount). The excess US tax paid (₹70,000) is not refundable but may be carried forward under US tax rules.

    Countries Where This Is Most Commonly Used

    Foreign Tax Credit claims are most common for NRIs returning from the United States, United Kingdom, Canada, Australia, Germany, and Singapore. The US in particular has a global taxation system — meaning US citizens and green card holders pay US tax on worldwide income regardless of where they live. When such individuals also become Indian tax residents, Form 44 / Form 67 is essential to avoid double taxation.

    NRI Status and RNOR — The Transition Window

    When you return to India after being an NRI, you typically get a 2–3 year window as an RNOR (Resident but Not Ordinarily Resident). During RNOR status, your foreign income is not taxable in India — only Indian-sourced income is. This makes RNOR status extremely valuable, and careful planning of your return date can determine whether you get this benefit for 2 years or just 1.

    Once RNOR status ends and you become a full Resident (ROR), your global income is taxable in India and FTC via Form 44 becomes essential if you still have foreign income. At NRI Tax CA, our NRI Status & Residential Advisory service (₹4,999) analyses your exact situation and advises on optimal transition timing.

    Get Your Form 44 Filed Correctly

    Foreign Tax Credit calculations involve DTAA interpretation, income-category matching, and precise timing requirements. An error here means either overpaying Indian tax (by not claiming enough credit) or a notice from the Income Tax Department (by claiming incorrectly). At NRI Tax CA, we handle Form 44 as part of your NRI ITR filing — ensuring the credit is maximised legally and filed on time.

    Compute your foreign tax credit and net India tax liability with our free NRI tax calculator. For Form 67 filing and DTAA claim in ITR, consult our NRI tax experts.

    Start your case here — fixed quote within 2 hours, ITR + Form 44 starting at ₹4,998.

  • TDS on NRI Property Sale in India 2026 — Complete Guide for Buyers and Sellers

    When an NRI sells property in India, the tax and TDS rules are significantly different from those applicable to resident Indians. Both the NRI seller and the Indian buyer have specific obligations under the Income Tax Act 2025. Getting these wrong can result in massive over-deduction of TDS, blocked funds, or penalties on the buyer. This guide explains everything clearly.

    Who Must Deduct TDS — The Buyer’s Obligation

    When a resident Indian buys property from an NRI, the buyer is legally required to deduct TDS at source under Section 195 of the Income Tax Act. This is not optional. The buyer must deduct TDS before making payment to the NRI seller and deposit it to the government. Failure to do so makes the buyer a defaulter — attracting interest, penalty, and even prosecution.

    The standard TDS rate on NRI property sale is 20% on long-term capital gains (property held over 2 years) and 30% on short-term capital gains. Crucially, these rates apply on the full sale consideration, not just the profit — unless the NRI obtains a Lower TDS Certificate.

    The Lower TDS Certificate — Form 128 (Erstwhile Form 13)

    The biggest financial mistake NRI sellers make is not applying for a Lower TDS Certificate (now Form 128 under the Income Tax Act 2025, previously Form 13 under the old Act). Without this certificate, the buyer deducts 20–22% TDS on the entire sale value — say ₹1 crore on a ₹5 crore property — even if the actual taxable gain after exemptions is only ₹30 lakhs.

    With a Lower TDS Certificate, the Income Tax Officer determines the exact taxable gain after accounting for indexed cost of acquisition, improvement costs, and exemptions under Section 54/54EC. TDS is then deducted only on the actual taxable amount — potentially reducing TDS from ₹1 crore to ₹6 lakhs in the above example.

    At NRI Tax CA, we handle Form 128 applications starting at ₹7,999. The process involves computing capital gains, preparing the application, liaising with the Income Tax Officer, and obtaining the certificate — typically within 2–4 weeks of filing.

    Form 144 — TDS Return Filing by the Buyer (Erstwhile Form 27Q)

    After deducting TDS, the buyer must file a quarterly TDS return in Form 144 (renamed from Form 27Q under the Income Tax Act 2025). This return reports the TDS deducted on payments to non-residents. The buyer must also issue a TDS certificate (Form 16A) to the NRI seller, which the seller uses to claim TDS credit when filing their ITR.

    Due dates for Form 144 filing are quarterly — 31 July, 31 October, 31 January, and 31 May. Late filing attracts a penalty of ₹200 per day. At NRI Tax CA, we handle complete Form 144 filing for buyers at ₹3,999 per transaction.

    Capital Gains Tax Computation for NRI Sellers

    NRI sellers are taxed on capital gains from Indian property under the same rules as residents, but with additional DTAA considerations. Key points:

    • Long-term capital gains (property held 24+ months): Taxed at 12.5% without indexation from FY 2024-25 onwards, or 20% with indexation for properties acquired before 23 July 2024 (taxpayer’s choice).
    • Short-term capital gains (held less than 24 months): Taxed at applicable income tax slab rates.
    • DTAA benefit: NRIs residing in countries with DTAA (USA, UK, UAE, Canada, Australia, etc.) may be entitled to preferential tax treatment or credit for taxes paid in the country of residence.
    • Section 54 exemption: Long-term capital gains reinvested in another residential property within specified timelines are exempt.
    • Section 54EC exemption: Gains up to ₹50 lakhs invested in NHAI/REC bonds within 6 months are exempt.

    Repatriation After Property Sale

    After the sale and TDS payment, the NRI seller can repatriate the net proceeds abroad subject to RBI guidelines. Repatriation from NRO account is permitted up to USD 1 million per financial year for NRIs, after payment of applicable taxes. You will need Form 145 and Form 146 (erstwhile 15CA/15CB) for the bank to process the overseas transfer.

    Step-by-Step Timeline for NRI Property Sale

    1. Pre-sale: NRI seller applies for Lower TDS Certificate (Form 128) — takes 2–4 weeks.
    2. At sale: Buyer deducts reduced TDS as per certificate. Sale deed registered.
    3. Within 30 days: Buyer deposits TDS to government via challan.
    4. Within the quarter: Buyer files Form 144 (erstwhile 27Q) and issues Form 16A to seller.
    5. ITR filing: NRI seller files ITR, claims TDS credit, and claims applicable exemptions.
    6. Repatriation: With tax clearance and Form 145/146, seller repatriates funds.

    Get Expert Help

    NRI property transactions involve multiple interdependent compliance steps. A mistake by the buyer or seller can result in penalties, blocked accounts, or excess tax deduction that takes years to refund. At NRI Tax CA, we handle the entire chain — Form 128 application, Form 144 filing, ITR, and repatriation documentation — so your transaction is fully protected.

    Compute TDS on your NRI property sale accurately with our free NRI tax calculator. For Form 15CA/15CB filing and Lower TDS Certificate application, get CA assistance here.

    Submit your case here and receive a complete fixed-fee quote within 2 hours.

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