NRI Income Tax Rates & Tax Slabs – NRIs, PIOs, OCIs

Be careful when reading claims that income up to ₹12 lakh is tax-free. The Section 87A rebate is for eligible resident individuals; an NRI generally cannot claim it merely because their total income is below ₹12 lakh. Special-rate income may also be treated differently when determining the tax payable.

Bank interest needs to be checked account by account. Interest on an eligible NRE account is generally exempt while the statutory conditions are satisfied, whereas NRO interest is generally taxable in India and may be subject to TDS. Rental income from Indian property is also generally taxable in India, subject to the applicable deductions and rules.

Capital gains from selling property or investments may be taxed at special rates rather than ordinary slab rates. So it is important to classify each income source before estimating your total tax.

An OCI card does not create a separate income-tax slab system. The key question is whether you are a resident or non-resident for Indian income-tax purposes during the relevant year.

An OCI cardholder who qualifies as a non-resident is generally taxed under the rules applicable to non-residents. An OCI cardholder who meets the Indian tax-residency conditions may be taxed under the rules applicable to their actual residential status. Citizenship, immigration status, and tax residency are different concepts.

The same caution applies to people who describe themselves as PIOs. The tax calculation depends on the individual’s status under Indian tax law, not simply their Indian ancestry or the label they use. If you spend significant time in India, check the residential-status tests carefully before selecting a tax regime or filing your return.

For an individual NRI, the applicable normal tax rates depend on the tax regime selected and the relevant tax year. Under the new regime for 2026–27, the slabs begin with nil tax up to ₹4 lakh, followed by 5%, 10%, 15%, 20%, 25%, and 30% as income rises through the prescribed brackets.

Under the old regime, the general basic exemption limit for a non-resident individual is ₹2.5 lakh, with rates of 5% from ₹2.5 lakh to ₹5 lakh, 20% from ₹5 lakh to ₹10 lakh, and 30% above ₹10 lakh. Unlike resident individuals, NRIs do not get a higher basic exemption limit simply because they are senior citizens.

These are normal slab rates. Certain income, such as specified capital gains or other income taxed at special rates, may be treated differently. Check the official Income Tax Department guidance for the relevant tax year before calculating your final liability.