NRI Income Tax in India 2026: TDS Rates & When to File

What India taxes, and what it does not

Taxed: interest on NRO accounts and deposits, rent from property in India, dividends from Indian companies and mutual funds, capital gains on Indian shares, funds and property, and pay for work done in India.
Not taxed in India: salary and other income earned abroad, interest on NRE and FCNR deposits, and money you send to your own account in India.
Your home country may tax some of the same income. A tax treaty decides which country gets the first say and lets you claim credit for tax paid in the other. See DTAA rates.

Whether you count as a non-resident in a year depends on days spent in India, not on your passport or visa. Check the rules on the residential status page.

Tax deducted at source on NRI income

Income	Rate	Note
NRO savings and FD interestWith cess, 31.2%. NRE and FCNR interest: nil.	30%	With cess, 31.2%. NRE and FCNR interest: nil.
Dividends from Indian companies and mutual fundsTreaty rate if lower.	20%	Treaty rate if lower.
Rent from property in IndiaThe tenant deducts it, whatever the rent.	30%	The tenant deducts it, whatever the rent.
Listed shares and equity funds held over 12 monthsOn gains above ₹1.25 lakh a year.	12.5%	On gains above ₹1.25 lakh a year.
Listed shares and equity funds held up to 12 months	20%
Property held over 24 monthsWithout indexation. The buyer deducts it on the price.	12.5%	Without indexation. The buyer deducts it on the price.
Property held up to 24 months, and debt fundsTDS is deducted at 30%.	Slab rate	TDS is deducted at 30%.

Base rates. A 4% health and education cess is added to all of them, and a surcharge once the income passes ₹50 lakh. Under the Income-tax Act, 2025 this tax is deducted under section 393(2), which replaced section 195 from 1 April 2026.

No threshold for non-residents. Residents have TDS only above set limits; for an NRI, the bank, tenant or buyer deducts from the first rupee.
Selling property: the buyer deducts tax on the full sale price, not your gain, unless you have a lower deduction certificate. From 1 October 2026 the buyer can do it with a PAN instead of a TAN; see buying property from an NRI. Work out the gain with the capital gains calculator.
A treaty can lower the rate on interest and dividends, but not on rent or gains from property in India.

Slabs for NRIs: same rates, no rebate

NRIs use the same slabs as residents and can choose the new or the old regime. Two things differ:

No rebate. The rebate that makes income up to ₹12 lakh tax-free in the new regime is only for residents. An NRI pays tax on everything above ₹4,00,000.
No higher limit for seniors. In the old regime the basic exemption is ₹2.5 lakh for an NRI of any age; the ₹3 lakh and ₹5 lakh limits are for resident senior citizens.

Special rates, such as 20% on short-term gains from shares, apply whatever the slab. Work out tax on the rest with the income tax calculator, leaving out the rebate.

When an NRI should file a return

Indian income above the exemption: ₹4,00,000 in the new regime, before deductions.
To get TDS back. NRO interest is taxed at 31.2%. If your total Indian income is small, most of that tax is refunded when you file.
To carry a loss forward, such as a capital loss on shares, against future gains.
After selling property or shares, to claim the TDS deducted on the full sale price against the tax on your actual gain.

The usual due date is 31 July after the end of the tax year, unless the government extends it. Use ITR-2, or ITR-3 for business income. Keep your bank's TDS certificates and check them against Form 26AS on the e-filing portal.

What changed under the Income-tax Act, 2025

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The rates above did not change, but many section and form numbers did. The ones NRIs meet most:

What	1961 Act	2025 Act
Residential status	Section 6	Section 6
TDS on payments to non-residents	Section 195	Section 393(2)
Tax treaty (DTAA) relief	Section 90	Section 159
Treaty declaration	Form 10F	Form 41
Remittance declaration and CA certificate	Forms 15CA and 15CB	Forms 145 and 146
Deductions such as PPF and ELSS (old regime)	Section 80C	Section 123

Returns for 2025-26 income, filed in 2026, still quote the 1961 Act. "Assessment year" and "previous year" are now a single "tax year".

Frequently asked questions

Do NRIs pay tax in India on salary earned abroad?

No. A non-resident is taxed in India only on income earned or received in India: interest on NRO deposits, rent, dividends, capital gains on Indian shares, funds and property, and salary for work done in India. Salary earned and paid abroad is not taxed in India.

Is NRE interest taxable?

Not in India. Interest on NRE and FCNR deposits is exempt while you are a non-resident. Your country of residence may still tax it: the US, UK, Canada and Australia tax their residents on worldwide income.

Can NRIs get the rebate that makes income up to ₹12 lakh tax-free?

No. The rebate is only for residents. An NRI pays tax on Indian income above ₹4,00,000 in the new regime (₹2.5 lakh in the old regime, at any age), with no rebate.

Do I have to file an income tax return in India as an NRI?

You must file if your Indian income, before deductions, is more than ₹4,00,000 in the new regime. You should also file if TDS was deducted on income below that limit, to get it back, or to carry a capital loss forward. Use ITR-2, or ITR-3 if you have business income in India; ITR-1 is not open to NRIs.

Which law applies to my return?

Income up to 31 March 2026 (financial year 2025-26) is taxed under the Income-tax Act, 1961, even if you file in 2026. Income from 1 April 2026 falls under the Income-tax Act, 2025, which calls it tax year 2026-27. The rates in this guide are the same under both.

Sources

Last checked on 13 October 2026. This is a general guide, not tax advice. Treaty terms, surcharges and your own facts can change the answer; check with a chartered accountant for large amounts.