Do NRIs Have to Pay Taxes on Foreign Income in India?

NS Posted by: Nakul Shetty
• 02 September, 2025
6 Reply

No, NRIs don't have to pay taxes in India if they are generating a foreign income outside India, then it is not taxable. However, if they are generating a taxable income in India from various sources, like any rental property, from business interests, dividends, interests on indian accounts, and capital gains from the Indian sources, then they are liable to pay taxes in India.

Tags : Foreign Income Tax in India

  • Varun Naidu 12 August, 2026

    I had almost the same situation after moving to Canada.

    As an NRI, my understanding was that foreign-source salary isn't automatically taxable in India simply because I'm an Indian citizen. My Canadian employment income was earned while I was living and working in Canada.

    However, I still had Indian income from an apartment and an NRO account, so I had Indian tax obligations.

    The important thing is not to confuse foreign income with foreign assets. Reporting requirements can be different depending on residential status and the type of return being filed.

    The current ITR-2 guidance is interesting because Schedule FSI, which reports foreign-source income, is available for residents, while Schedule FA for foreign assets/income isn't required from a non-resident or RNOR.

    That doesn't mean a non-resident can ignore every foreign transaction. It means you need to determine your status and the specific reporting provisions that apply.

    I'd also check the tax treaty if you're living in the US, UK, Canada or another country. Paying tax in the foreign country doesn't automatically mean you can ignore Indian tax, but it also doesn't mean the same income is necessarily taxed twice without relief.

  • Suresh Pillai 11 August, 2026

    I think the biggest source of confusion is that people use NRI and non-resident taxpayer interchangeably.

    For Indian income tax, residential status is determined under the applicable provisions for the relevant tax year. The Income Tax Department's current FAQ confirms that the basic residence tests continue under the Income Tax Act, 2025 for tax years beginning on or after April 1, 2026. It also confirms that the NOR/RNOR concept continues.

    If you're genuinely NR, foreign-source income generally isn't treated the same way as Indian-source income for Indian tax purposes.

    But there are exceptions and specific rules depending on how income arises, where it is received, and the taxpayer's circumstances. For example, simply receiving money in a foreign bank account doesn't by itself answer every tax question.

    Also, if you have recently started spending much more time in India, don't rely on your previous year's status. Residential status is determined separately for each tax year.

    For a US-based NRI with salary, brokerage investments, retirement accounts and Indian income, I'd calculate the Indian residential status first and then review the Indian and US reporting obligations together.

  • Manika Bajaj 04 August, 2026

    In my experience, the key is Indian tax residential status, not simply whether you're an Indian citizen or an NRI.

    When I was non-resident for Indian tax purposes, I didn't treat my US salary as automatically taxable in India just because I was an Indian citizen. My Indian income, such as rental income and interest from Indian accounts, was dealt with in India separately.

    The Income Tax Department's current guidance says residential status has to be determined for the relevant tax year. For a person who is non-resident, the Indian tax treatment of income is different from that of a resident.

    One important distinction is RNOR. I was RNOR for a period after returning to India, and the foreign-income rules weren't the same as when I became ordinarily resident.

    I would therefore first calculate your days in India and determine whether you are NR, RNOR or ROR for the specific year. Don't decide based only on your US immigration status.

    Also, keep your US income records and Indian income records separate when preparing the return. If you have substantial foreign investments, retirement accounts or other cross-border assets, I'd get the current filing requirements checked before submitting the ITR.

  • Khushi Shetty 11 September, 2025

    If the income you are getting from indian sources, then you are liable to pay taxes in India, and the NRI income tax will depend on your residential status for the year.    

    Upon getting a salary in India from any services, business, or Indian registered company, you have to pay taxes in India, and if you get capital gains on the transfer of property in India. If the NRI is earning outside India, it is not taxable in India. Only the income you get from India or received in Indian is taxable. Any other income that is generated outside of India from any business or investments is liable to pay taxes in India. As an NRI, if you are not generating Income in India, then you don't need to pay tax in India. 

    Additionally, if an NRI whose Income is more than 2,50,000 or more, then he needs to file an Income tax return in India.     

  • Simran Sehgal 08 September, 2025

    No, you don't have to pay taxes on the foreign income sources in India. However, if you are generating an income in indian from the following list, then you need to pay tax in India as an NRI: 

    • From any salary that you receive in India from any services or an Indian company. 
    • Getting a professional salary in Indian bank accounts. 
    • If you are generating an income from a rental property. 
    • Capital gains on the sale and transfer of property in India. 
    • From the Income you get from fixed deposits. 
    • On the interest from indian savings accounts. 

Join The Discussion

Share Your Thoughts and Connect with Others.

Releated Topics
  • Can NRIs Buy Agricultural Land in India? Rules and Exceptions

    I’m an NRI living in Canada and my family owns agricultural land in India. I’ve been thinking about purchasing an additional piece of farmland near our hometown, partly as a...

    • 3 Reply
    • 8 Views
  • What Happens If FEMA Rules are Violated?

    I’m an NRI living abroad and recently learned that some banking and investment transactions in India must comply with FEMA (Foreign Exchange Management Act) rules. I’m trying to understand what...

    • 3 Reply
    • 19 Views
  • Can Joint Holders Operate an NRE Account?

    I am an Indian citizen living in Canada and have an NRE savings account with an Indian bank. I want to add my wife as a joint holder so she...

    • 3 Reply
    • 20 Views
  • Can NRIs Gift Money to Family Members in India?

    Hi everyone, I’m an NRI living in the USA, and I want to send some money to my parents and siblings in India as a gift. The money would come...

    • 3 Reply
    • 20 Views
  • Is FCNR Better Than an NRE Fixed Deposit?

    I am an Indian citizen currently living in the USA and trying to decide where to keep some of my savings in India. I already have an NRE savings account,...

    • 3 Reply
    • 21 Views
  • Can I Have Both NRE and NRO Accounts?

    I’m an Indian citizen currently living in the USA on an H-1B visa, and I’m trying to organize my Indian banking now that most of my income is earned overseas....

    • 3 Reply
    • 22 Views
  • What Documents are Needed to Claim DTAA Benefits in India?

    I am an NRI living in the UK and receive some income from India. I want to claim DTAA benefits so that I am not paying more tax in India...

    • 3 Reply
    • 45 Views
  • Can DTAA Reduce TDS on Property Sales?

    I am an NRI living in the UAE and I am planning to sell a residential property that I own in India. The buyer's CA told me that because I...

    • 3 Reply
    • 39 Views
  • Which Banks Offer the Best NRI Banking Services?

    I’m planning to move abroad permanently and am trying to decide which Indian bank would be easiest to manage as an NRI. I currently have a regular savings account in...

    • 3 Reply
    • 55 Views
  • Can I Repatriate Money From an NRE or NRO Account?

    I am an NRI and currently maintain both NRE and NRO accounts in India. I want to understand the rules for sending money from these accounts back to my overseas...

    • 3 Reply
    • 86 Views
comunity img

Join Our Facebook Community of
NRIs/OCIs Like You

Join Community
Join Community