NRI Income Tax Rules in India for FY 2026-27
Quick Answer
NRIs are only taxed on income earned or accrued in India (like rent, capital gains, or interest from NRO accounts). Income earned outside India is entirely tax-free in India. NRIs are not eligible for the Section 87A rebate.
Determining Residential Status (2026)
Your tax liability in India depends on your residential status. You are an NRI if you stay in India for less than 182 days in a financial year. For Indian citizens or PIOs visiting India, the limit is extended to 182 days (or 120 days if total Indian income exceeds ₹15 lakh).
Deemed Resident: An Indian citizen with total income (other than foreign source) exceeding ₹15 lakh who is not liable to tax in any other country is deemed a resident of India.
What Income is Taxable for NRIs?
NRIs must pay tax in India on:
- Salary received for services rendered in India.
- Rental income from a property located in India.
- Capital gains on sale of assets (shares, property) located in India.
- Interest earned on NRO (Non-Resident Ordinary) accounts.
Tax-Free Income: Interest earned on NRE (Non-Resident External) and FCNR (Foreign Currency Non-Resident) accounts is 100% tax-free for NRIs.
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