Who this is for
NRIs and OCIs earning income from Indian property, investments or business; Indians who have recently moved abroad or are returning to India (where RNOR status matters); and individuals with foreign income who hold assets, accounts or sources of income in India. If you have a PAN, an Indian bank account, or property in India, there is usually a compliance position to get right.
Selling property in India as an NRI — the big TDS trap
This is where NRIs lose the most money to cash-flow, not to tax. When an NRI sells Indian property, the buyer must deduct TDS under Section 195 on the entire sale value, not on the gain — for a long-term holding at 12.5% (without indexation) plus applicable surcharge and cess, and short-term gains at slab rates. On a large sale value that is a very big deduction, usually far more than the actual tax on the real gain.
The fix is a lower/nil-deduction certificate under Section 197, applied for before the sale completes: it tells the buyer to deduct on the actual computed gain instead of the full value, so a large sum is not locked up with the department until a refund the following year. Repatriating the proceeds afterwards then needs Form 15CA/15CB. Timing matters — the Section 197 application should be in motion before the sale deed, which is why this is the first thing to raise when a sale is planned.
What’s covered
- Residential status determination. Your Indian tax liability turns entirely on residential status — resident, non-resident, or RNOR — which is decided by days of physical stay across the relevant years. The status is computed against the day-count rules and the income that India can tax flows from it.
- NRI income tax return filing. Filing of Indian returns for income that arises or is received in India — rent from Indian property, interest, dividends, capital gains and any business or professional income connected to India.
- DTAA relief & foreign tax credit. Where the same income is taxable in two countries, relief under the applicable Double Taxation Avoidance Agreement is claimed — either an exemption or a credit for tax paid abroad — so the same rupee is not taxed twice.
- Capital gains on Indian property and shares. Computation of gains on the sale of Indian house property, land, listed and unlisted shares and mutual funds, including indexation where available and reinvestment exemptions where eligible.
- Repatriation & 15CA/15CB certification. Moving funds out of India — sale proceeds, rent, inheritance, balances in your accounts — requires Form 15CA and, in most cases, a CA's Form 15CB certificate confirming the correct tax position. Both are prepared and filed.
- Lower / nil-TDS certificate (Section 197). When a buyer would otherwise deduct TDS at a high flat rate on a property purchase or other payment, an application under Section 197 for a lower or nil deduction certificate prevents large refunds being locked up for a year.
- NRO / NRE account tax matters. Tax treatment of NRO and NRE account income, TDS on NRO interest, and the certification and limits that apply when repatriating from these accounts.
Who must file, and NRE vs NRO
As an NRI you must file an Indian return where your India-sourced income crosses the basic exemption limit (₹4 lakh under the default new regime), or to claim a refund of TDS, or to carry forward a loss. On accounts: NRE interest is exempt from Indian tax (Section 10(4)), while NRO interest is taxable and TDS is deducted on it at around 30% plus surcharge and cess — often reducible under the DTAA and reclaimable by filing.
Returning to India? RNOR is a window worth using
If you are moving back, you may qualify as Resident but Not Ordinarily Resident (RNOR) for a limited window — typically the first two to three years after return, under the day-count conditions in Section 6. During RNOR, your foreign income generally stays outside Indian tax — a genuinely valuable window that is easy to miss. Returning employees who still hold foreign RSUs or ESOPs are a common overlap: see our RSU & foreign-stock taxation page for how those holdings are treated once you are resident again.
Fully remote — your location is no barrier
Every step is handled online. Documents are shared over WhatsApp or email, filings and certificates are submitted on the Indian portals, and verification uses your registered details — there is no need to travel to India or appoint anyone in person. Time-zone differences are worked around, and you receive each acknowledgement as it is filed.
What to send first
Your PAN, your passport pages showing dates of entry and exit (for the residential-status calculation), and a short description of the Indian income or transaction involved — for a property sale, the sale agreement and purchase records. A clear assessment of your position comes first, before any work begins.