NRI ITR 2025: Are You Paying More Tax Than You Should?

NRIs earning income in India — rent, interest, dividends, capital gains — must file an ITR. The tax slabs, surcharge rules, and rebates are different from resident Indians, and getting them wrong costs real money.

Here's what happened: NRIs are taxed in India only on income earned or received in India — such as rent, FD interest, capital gains, and dividends.. NRIs cannot use the new tax regime's ₹12 lakh rebate benefit; their basic exemption starts at ₹3 lakh under the old regime.. A surcharge of 10% to 37% applies on top of income tax if total Indian income exceeds ₹50 lakh in a financial year..

What you should do: Determine your residential status first — if you spent fewer than 182 days in India during FY2024-25, you are likely an NRI for tax purposes.. Check all Indian income sources — rental income, NRO FD interest, mutual fund gains, and property sale proceeds are all taxable in India for NRIs.. Claim marginal relief if your income is just above a surcharge slab threshold — it can save thousands by ensuring the extra tax does not exceed the extra income..

NRIs can claim DTAA (Double Taxation Avoidance Agreement) benefits — if your country of residence has a tax treaty with India, you may pay lower withholding tax on Indian income. Always submit Form 10F and a Tax Residency Certificate to your Indian bank or broker before year-end.