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I am an NRI living abroad and still have some income in India from bank interest and other investments. I want to understand how income tax slabs work for NRIs in India for the 2026–27 tax year.
I have seen different tax slab tables online, and some websites say income up to ₹4 lakh is tax-free under the new tax regime. However, I am not sure whether the same rule applies to NRIs or whether we have different tax rates.
I would also like to know whether NRIs can choose between the old and new tax regimes. Does the tax rate depend on age, and can NRIs claim the same tax rebate as resident Indians?
Another concern is TDS on NRE and NRO account interest. If tax has already been deducted by the bank, do I still need to file an income tax return in India?
I would appreciate advice from anyone who has dealt with NRI income tax in India, especially regarding bank interest, rental income, and investment income.
I would first check your residential status for Indian income tax purposes. Being an NRI in everyday terms or holding a foreign passport does not, by itself, settle your tax status for a particular year. The number of days you spend in India and other applicable rules matter.
Also, not all Indian income is taxed in the same way. Rental income, interest, capital gains and certain investment income can have different rules or special tax rates. The ordinary slab rates may not tell the whole story.
For example, NRO account interest is generally taxable in India and banks may deduct TDS. NRE account interest is generally exempt when the statutory conditions for the account holder and account are met. Don't treat the two accounts as having identical tax treatment.
If you have several income sources, compare the old and new tax regimes and check the applicable deductions before choosing. It is worth getting professional advice if you also have foreign income, capital gains or tax treaty considerations.
For NRIs, the applicable tax slabs depend on the tax regime you choose and the type of income you earn in India.
Under the new tax regime, the general slab rates for Tax Year 2026–27 are:
Taxable incomeTax rateUp to ₹4,00,000Nil₹4,00,001–₹8,00,0005%₹8,00,001–₹12,00,00010%₹12,00,001–₹16,00,00015%₹16,00,001–₹20,00,00020%₹20,00,001–₹24,00,00025%Above ₹24,00,00030%
These are progressive rates, so each rate applies to the relevant portion of taxable income rather than the entire income.
One important point: the rebate available to resident individuals under Section 87A does not generally apply to NRIs. Therefore, don't assume that an NRI with income below ₹12 lakh will automatically pay no tax.
You can check the latest rates on the official Income Tax Department website before filing.
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About filing a return after TDS: tax being deducted by a bank does not automatically mean that you have no income tax return filing obligation.
Whether you need to file depends on your total taxable income, the nature of your income and the applicable filing conditions. Filing may also be useful if excess TDS was deducted and you want to claim a refund.
Keep your bank interest certificates, TDS details, rental income records and investment statements together. Check Form 26AS and the Annual Information Statement (AIS) on the income tax portal, and reconcile them with your own records before filing.
Also remember that the old tax regime generally has different slab thresholds and may allow specified deductions that are unavailable under the new regime. For NRIs, the old-regime slab rates do not provide the higher age-based thresholds available to resident senior citizens.