NRI Tax Filing Essentials: What Every Global Indian Should Know

NRI Tax Filing Essentials: What Every Global Indian Should Know

🗓️ June 8, 2025

Do you own property in India, earn interest on your NRO account, or have mutual fund investments—while living abroad?

Have you ever wondered if you're still required to file taxes in India? Or what happens if you don't?

If you're a Non-Resident Indian (NRI), managing your financial life across borders can feel overwhelming—different tax rules, time zones, and systems. And amid all that, Indian income tax filing often falls to the bottom of the list—until it becomes urgent.

At Angel Services, we're here to change that.

This is the first article in our NRI Tax Series—designed to help global Indians like you confidently navigate India's tax system: no jargon, no fear—just clarity, compliance, and control.

Why Should NRIs Bother About Tax Filing in India?

A common misconception is:

"If TDS is deducted or my income is below ₹2.5 lakhs, I don't need to file."

That is not always true.

If you earn any income in India—be it rent from a flat in Mumbai, interest from NRO deposits, or capital gains from mutual funds—you may legally need to file a return.

Even when it's not mandatory, filing can benefit you by:

  •  Claiming excess TDS refunds

  • Maintaining a clean tax history in India

  • Smoothing future remittances, property sales, or inheritance claims

Common Myths We Hear from NRIs:

  • "I live abroad, so Indian taxes don't apply to me."

  • "Only citizens need to file taxes in India."

  • "My NRE and NRO accounts are tax-free."

We'll bust each of these myths in upcoming posts. But first, let's make sure you've got the essentials right.

The 3 Things Every NRI Must Know Before Filing

1. Know Your Residential Status – It's Not About the Passport

Indian tax law doesn't care about your citizenship—it cares about how many days you spend in India.

You're treated as an NRI for tax purposes if:

  • You were in India for less than 182 days in a financial year or

  • You were in India for less than 60 days in that year and less than 365 days in the previous 4 years

Why it matters: Your residential status determines what income is taxable in India.

2. Know What's Taxable – It's Only Indian-Sourced Income

As an NRI, only your income earned or received in India is taxable. This includes:

  • Rental income from Indian property

  • Interest from NRO accounts or FDs

  • Capital gains from Indian mutual funds, shares, or property

  • Business/professional income arising in India

Your foreign income is not taxable in India—as long as you qualify as an NRI.

3. Know When to File – Even If You Think You Don't Have To

You must file an ITR in India if:

  • Your Indian income exceeds ₹2.5 lakhs in a year

  • You had TDS deducted and want to claim a refund

  • You sold a property or earned capital gains

  • You returned to India and need to declare foreign assets

Even if you're not obligated, it's often smart to file proactively—to prevent future scrutiny or delays in money transfers.

Stay tuned. Follow Angel Services for weekly insights that make tax filing simpler—no matter where in the world you are.