Non-Resident Indians (NRIs) face unique complexities when it comes to income tax filing in India. At Savetaxs, we specialize in helping NRIs navigate the intricate tax landscape, ensuring compliance and maximum tax benefits. This blog explains the essential aspects of NRI income tax for FY 2025-26 and how the Double Taxation Avoidance Agreement (DTAA) can help NRIs avoid paying tax twice on the same income.
Understanding NRI Income Tax for FY 2025-26
For the financial year 2025-26, NRIs have the option to choose between the old tax regime and the new tax regime introduced under Section 115BAC. The new regime applies different tax slabs with lower rates but fewer deductions. NRIs are taxed on income earned or accrued in India, which includes:
- Salary income received in India
- Income from capital gains on sale of properties or shares
- Interest income from NRO and NRE bank accounts
- Rental income from Indian properties
NRIs must file Income Tax Returns (ITR), typically using ITR-2 or ITR-3 forms, if their total Indian income exceeds the basic exemption limit of ₹2.5 lakh. Timely and accurate filing helps in claiming refunds from excess TDS deductions and maintaining compliance.
What is DTAA and How Does It Benefit NRIs?
DTAA is an agreement between India and other countries to prevent double taxation of income earned in both jurisdictions. This agreement allows NRIs to either:
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Get exemption from paying tax in India on income taxed in their country of residence, or
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Claim tax credit for taxes paid abroad, reducing their overall tax liability in India.
Common incomes covered under DTAA benefits include salary, interest, dividends, royalties, and pensions. For instance, interest earned on NRE accounts is typically exempt under DTAA.
How to Claim DTAA Benefits
To claim DTAA benefits, NRIs must submit:
- A Tax Residency Certificate (TRC) issued by the tax authorities of their country of residence.
- Form 10F electronically filed on the Income Tax e-filing portal providing additional information required by the Indian tax department.
Claiming DTAA benefits ensures NRIs do not pay taxes twice, maximizing their post-tax income.
Why Choose Savetaxs for Your NRI Tax Filing?
Savetaxs offers expert NRI income tax filing services tailored to your specific situation:
- Filing ITR-2/ITR-3 for salaried income, capital gains, and rental income
- Assistance with reporting NRO/NRE bank interest and claiming TDS refunds
- Guidance on DTAA applicability and claiming tax credits
- Dedicated CA consultation and personalized support through emails and calls
Our expertise simplifies tax compliance for NRIs so they can focus on their lives abroad with peace of mind.
