TDS and Tax Liability in India
TDS and Tax Liability in India for NRIs – Casela Advisors
Understanding your tax obligations in India can be complex—especially as a Non-Resident Indian (NRI), RNOR, or Deemed Resident. At Casela Advisors, we provide expert guidance from Chartered Accountants specializing in NRI taxation to help you navigate India’s Income Tax Act and applicable Double Tax Avoidance Agreements (DTAAs) efficiently.
How Residential Status Affects Tax Liability
Under the Income-tax Act, 1961, the scope of taxable income in India depends on your residential status for a given financial year. This classification also aligns with how your income may be taxed in India and abroad. The three possible residential statuses are:
- Resident and Ordinarily Resident (ROR)
- Resident but Not Ordinarily Resident (RNOR)
- Non-Resident (NR)
Note: A person classified as a Deemed Resident is treated as RNOR under Indian tax laws. For conditions, refer to FAQ No. 4 under “Residential Status”.
Taxability of Income Based on Residential Status
The tax implications of different income sources are summarized below:
| Sr. No | Type of Income | ROR | RNOR | NR |
|---|---|---|---|---|
| 1 | Income from Indian sources (e.g., interest from NRE/NRO accounts, dividends, capital gains, rental income) | ✅ Taxable | ✅ Taxable | ✅ Taxable |
| 2 | Income earned or received in India | ✅ Taxable | ✅ Taxable | ✅ Taxable |
| 3 | Foreign income from a business or profession controlled from India | ✅ Taxable | ✅ Taxable | ❌ Not Taxable |
| 4 | Other foreign income (earned and received outside India) | ✅ Taxable | ❌ Not Taxable | ❌ Not Taxable |
Double Taxation Relief – DTAA Guidance
If you’re paying taxes on the same income in both India and your country of residence, you may be eligible for tax credit or relief under the relevant Double Tax Avoidance Agreement (DTAA). Our NRI tax consultants ensure you get maximum benefit without risk of non-compliance.
TDS Applicability for NRIs
Non-Residents are subject to Tax Deducted at Source (TDS) on certain types of income earned or received in India, including:
- Interest on NRO accounts
- Sale of immovable property in India
- Rent received from Indian tenants
- Capital gains from Indian shares or mutual funds
- Professional or consultancy fees
Casela Advisors offers TDS compliance services for NRIs, ensuring accurate computation, timely payment, and Form 15CA/15CB filing where required.
Important FAQs You Must Know:
- ✅ Slab rates for NRIs – See FAQ No. 5 for detailed income tax slab applicable to NRIs.
- ✅ TDS rates applicable to NRIs – See FAQ No. 7 for current rates of tax deduction at source (TDS) on various income types.
Why Choose Casela Advisors?
As a trusted Chartered Accountant firm for NRIs, Casela Advisors provides:
- Comprehensive NRI tax planning
- Expert DTAA guidance
- TDS certificate management
- Income tax return (ITR) filing for NRIs
- Repatriation and capital gains tax assistance
