NRI and overseas: answers to common questions
Residential status, returns and treaty relief for NRIs, property sales, NRE and NRO accounts, remittances abroad and foreign assets. Each answer gives the short answer first, then the detail and the legal basis.
Residence and returns
How is residential status decided for income tax: the 182-day and 120-day rules?
You are resident in a tax year if you are in India for 182 days or more, or for 60 days or more and 365 days in the four previous years. For Indian citizens and persons of Indian origin visiting India, 60 becomes 182, except that it becomes 120 if Indian income exceeds ₹15 lakh. An Indian citizen with Indian income above ₹15 lakh who is not taxed in any other country is also treated as resident. Such cases are usually 'not ordinarily resident'.
Read the full answer · Reviewed 8 November 2026
When must an NRI file an income-tax return in India, and how is double taxation relief claimed?
An NRI must file a return if Indian income exceeds the basic exemption limit, or to claim a refund of excess TDS or carry forward a loss. NRIs use ITR-2 or ITR-3, not ITR-1 or ITR-4, and cannot claim the section 87A (now section 156) rebate. To use a lower tax-treaty rate, the NRI needs a tax residency certificate from the country of residence and Form 10F (now Form 41). A resident claims credit for foreign tax in Form 67 (now Form 44) before filing.
Read the full answer · Reviewed 8 November 2026
Who must report foreign assets in Schedule FA, and what is the penalty for not doing so?
A resident and ordinarily resident individual must report every foreign asset and foreign income source in Schedule FA, even with no income from it: bank accounts, shares, ESOPs and RSUs of a foreign employer, property, insurance and signing authority. Not reporting can attract a ₹10 lakh penalty under the Black Money Act, except where movable foreign assets total ₹20 lakh or less. The FAST-DS 2026 scheme lets small taxpayers regularise until 31 December 2026.
Read the full answer · Reviewed 8 November 2026
Property, accounts and remittances
How much TDS is deducted when an NRI sells property in India, and can it be reduced?
A buyer from a non-resident seller must deduct TDS under section 195 (now section 393(2)), not the 1% that applies to resident sellers. On a long-term gain the rate is 12.5% plus surcharge and cess; on a short-term gain, 30% plus surcharge and cess. Buyers usually deduct on the whole price unless the seller produces a lower-deduction certificate. The buyer needs a TAN and files Form 27Q (now Form 144).
Read the full answer · Reviewed 8 November 2026
How is interest on NRE, NRO and FCNR accounts taxed?
Interest on an NRE account is tax-free for a non-resident, and interest on an FCNR(B) deposit is tax-free for a non-resident or a resident who is not ordinarily resident. Interest on an NRO account is taxable, and the bank deducts TDS at 30% plus surcharge and cess unless a lower treaty rate is claimed with a tax residency certificate and Form 10F. When you return to India, NRE and FCNR accounts must be redesignated.
Read the full answer · Reviewed 8 November 2026
How much can a resident send abroad under LRS, and when are Forms 15CA and 15CB needed?
A resident individual can send up to USD 250,000 a financial year abroad under the RBI's Liberalised Remittance Scheme, for travel, education, medical treatment, gifts, maintenance of relatives and investment. Banks collect TCS above ₹10 lakh a year. Forms 15CA and 15CB (now Forms 145 and 146) apply to payments to non-residents that are taxable in India, for example from an NRO account; most personal LRS remittances are on the exempt list.
Read the full answer · Reviewed 8 November 2026