Question 1

How is NRI status determined in India?

Accepted Answer

NRI (Non-Resident Indian) status under Income Tax Act: You are a Resident if you stayed in India for 182+ days in the financial year, OR 60+ days in the FY and 365+ days in the preceding 4 FYs. An Indian citizen or person of Indian origin visiting India: the 60-day rule becomes 120 days if global income exceeds Rs 15 lakh. If you fail both tests, you are Non-Resident (NRI) for that year.

Question 2

What is TDS on property sale by NRI?

Accepted Answer

When a buyer purchases property from an NRI, TDS must be deducted: LTCG (held >24 months): 20% + surcharge + cess = approximately 22.66% for gains up to Rs 50 lakh. STCG (held ≤24 months): 30% + surcharge + cess = approximately 34% (taxed at slab rate). TDS is deducted on the gross sale consideration, not the gain. The NRI can apply for lower TDS certificate from IT department if actual tax liability is lower.

Question 3

What income of NRI is taxable in India?

Accepted Answer

NRIs are taxed only on income earned/received in India: Rental income from Indian property. Capital gains on sale of Indian assets. Interest on NRO accounts (fully taxable, TDS 30%). Dividends from Indian companies. Business income from India. Salary for services rendered in India. Income earned outside India is NOT taxable in India for NRIs. Interest on NRE and FCNR accounts is exempt from tax in India.

Question 4

What is DTAA and how does it help NRIs?

Accepted Answer

DTAA (Double Tax Avoidance Agreement) prevents NRIs from paying tax on the same income in both India and their country of residence. India has DTAAs with 90+ countries including USA, UK, UAE, Canada, Australia, Singapore. Under DTAA, NRI can claim credit for taxes paid in India against their overseas tax liability, or may be taxed at a lower rate. UAE NRIs benefit most as UAE has no personal income tax, so India-sourced income taxed in India only.

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