What are the Key Changes Introduced by the Income Tax Bill 2025 Concerning NRIs?

Here are some of the major clauses that impacted NRIs' income tax bill in 2025. 

• Clause 5: It defines the source of Income for residents and non-residents. 
• Clauses 60 and 61: For deductions of the taxation of NRIs and head office expenses. 
• Clause 174: Avoids tax by preventing income transfers to non-residents. 
• Clauses 207 and 209: It sets the tax rates on distributive income, interests, royalties, fees for technical services, and dividends. 
• Clause 211: It defines tax rates for the non-resident sportsperson. 
• Clauses 213 to 215: It defines capital gains tax, taxable income, and investment income exemptions. 
• Clause 216: It prevents an NRI from filing an ITR if tax is deducted at source (TDS) on the income.  
• Clause 217: It includes grandfathering rules for investment income taxation if any NRI returns to India. 
• Clause 306: This clause assigns tax agents for NRI tax approval. 
• Clause 422: It helps and strengthens the tax authorities' ability to recover remaining tax dues from the NRIs' Indian property.  
• Clause 505: Instructed Liaison offices in India to submit annual tax statements. 

Here are the new tax rates under the new Income Tax bill 2025: 

• On the dividends: 20%
• Dividends from the IFSC units: 10%
• Interest on the indian company debut or the Indian government (foreign currency loans): 20%
• Interest on the infrastructure and construction debt funds: 5%
• On Mutual Funds income (in foreign currency): 20%

Under the new Income Tax Bill 2025, the new TDS, capital gains, and Tax recovery that an NRI must know are: 

• If any income received by the NRI in India, including TDS on any sale of property, should be subjected to TDS at the applicable rates.  
• If an NRI is generating an income through the investment or long-term capital gains, and the TDS is already deducted, then they don't have to file an ITR. 
• An NRI who is reinvesting in the long-term capital gains in selected assets under six months can get the exemption on capital gains tax. 
• These bills make sure that all the foreign companies operating in India are taxed accordingly and strengthen the POEM rules.