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Yes, an NRI can show his business income, which he is receiving or getting in India from the registered business. But remember, if your income is generated from outside India, then you are not taxable in India. Here are some of the points that you need to remember:
At the end, as an NRI, you can run a business in India, but you have to pay the required tax and show your income in your ITR.
My situation was slightly different because I already had an Indian proprietorship before moving overseas.
After becoming non-resident, I didn't simply close the business. I had to look at the tax consequences of continuing the activity and also the rules governing my investment and operation of the business from outside India.
This is where I think a lot of online discussions become confusing. Income-tax rules and FEMA rules are not the same thing.
The Income Tax Department clearly recognizes business/professional income for non-resident individuals and provides ITR-3 for an individual, whether resident or non-resident, who has business or professional income.
But if you're asking whether an NRI can invest in or operate a particular type of Indian business, you also need to check the FEMA/RBI rules applicable to that business structure.
For example, RBI's rules have historically permitted NRIs/persons of Indian origin resident outside India to invest in certain Indian proprietorship or partnership concerns, subject to conditions. The permitted route and conditions can depend on the investment and repatriation arrangement.
So I wouldn't assume that "I can report business income" automatically answers "I can set up any business I want."
Yes, an NRI can have business income arising in India. Being a non-resident for Indian income-tax purposes doesn't automatically mean that you cannot have taxable income from India.
I had Indian business income while living abroad, and I reported it in my Indian tax return. The important part was determining which income was taxable in India and filing the appropriate return.
For AY 2026-27, the Income Tax Department specifically lists ITR-3 as applicable to an individual or HUF, whether Resident or Non-Resident, having income under the head "Profits or Gains of Business or Profession," along with other applicable income heads.
One thing I would not do is automatically select ITR-4 just because the business is small. The current Income Tax Department guidance says ITR-4 is for eligible resident individuals/HUFs and resident firms, and an NRI cannot use it.
The business structure also matters. A proprietorship isn't treated the same way as a company, and there can be separate FEMA/RBI considerations when a person living outside India invests in an Indian business.
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Most people are confused about whether they should show their business income in India.
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The first thing I'd establish is where the business activity and income actually arise.
If an NRI owns or participates in a business that operates in India and the income is taxable in India, that income may need to be reported in the Indian return. The exact tax treatment depends on the nature of the business, structure, source of income and applicable rules.
For someone with business income, ITR-3 is the important return to look at. The Income Tax Department says ITR-3 is applicable to individuals and HUFs having income from profits or gains of business or profession and can apply to both residents and non-residents.
I'd be particularly careful about using ITR-4. The current government guidance specifically excludes NRIs from ITR-4, even though ITR-4 covers certain presumptive business/professional income for eligible resident taxpayers.
Also, if you're receiving income from a business in India while living in the UK, there could potentially be UK tax considerations as well. Whether foreign tax credit or treaty relief applies is a separate question and depends on the facts.
For anything involving a new business structure, foreign remittances, repatriation or substantial income, I'd verify the current Income Tax Department and RBI/FEMA rules rather than relying only on forum experiences.