What are Tax Implications of NRI?

I think the biggest issue is assuming that all NRIs have the same tax treatment.

An NRI with only Indian bank interest may have a very different filing situation from someone who has rental property, shares, mutual funds, business income or Indian property sales.

The RNOR category can also matter when someone moves between India and another country. The Income Tax Department says the RNOR criteria continue under the Income Tax Act, 2025, including the conditions relating to being non-resident in 9 out of 10 preceding years or staying in India for 729 days or less during the preceding seven years.

So I'd suggest checking these separately:

1. Residential status
2. Source and type of each income
3. TDS already deducted
4. Applicable deductions/exemptions
5. DTAA with the country of residence
6. ITR filing requirement
7. Foreign tax credit, if applicable

That gives a much clearer picture than trying to apply one "NRI tax rate" to everything.

The NRO versus NRE interest distinction caused me a lot of confusion.

My understanding is that interest earned on an NRO account is generally taxable in India, whereas NRE account interest can have different treatment when the account holder qualifies for the relevant exemption under the applicable rules.

Rental income from property located in India is also something an NRI needs to consider for Indian taxation. Capital gains from selling Indian assets can also be taxable in India depending on the asset and the applicable rules.

Another important point is TDS. NRIs can have tax deducted at source on certain Indian income, and the amount deducted isn't necessarily the final tax liability. Depending on the situation, an ITR may be needed to calculate the final liability or claim a refund.

I would also keep Indian tax and foreign tax separate initially. If the same income is taxed in both countries, the applicable DTAA/foreign tax relief rules need to be checked rather than assuming that the Indian tax simply disappears.

I went through this recently because I have Indian rental income while living abroad.

The first thing I learned is that you shouldn't start with the type of income. You first need to determine your residential status for Indian income-tax purposes.

For the current tax year beginning April 1, 2026, the Income Tax Department says the basic residency tests remain broadly the same. The 182-day test and the 60-days-plus-365-days test continue to be relevant, with special rules for Indian citizens and persons of Indian origin visiting India.

Once you're actually a non-resident, the next question is what income is taxable in India.

In my case, my Indian rental income and Indian bank interest were the main items I had to consider. My UK salary was a different issue because it was foreign-source income.

I also found that an NRI generally cannot simply assume that "I live abroad, so nothing is taxable in India." Indian-source income can still create an Indian tax liability and potentially an ITR filing requirement.

What is the taxable income for NRIs? 

The tax slabs for the NRI on ba sis of their income are: 

• Salary Income: Any income generated in India is taxable at income slab rates. 
• Capital Gains Tax: The NRI is taxable on the capital gains at a 12.5% or 20% slab rate with surcharges and cess. It also depends on the period of holding and the nature of the capital asset. 
• Rental Income: This is taxable in India, and an NRI can claim a 30% standard deduction on the municipal tax paid and the rental income.