NRI taxation & DTAA relief

Almost every NRI question turns out to be the same question underneath: which country gets to tax this, and have I already paid there?

Step one is residential status, and it is arithmetic, not a feeling. Section 6 counts days in India across the current year and the four preceding ones; there is a separate deemed-residency rule for Indian citizens with Indian income above a threshold who are not liable to tax anywhere else; and there is the RNOR middle status, which is the most valuable and least understood category of the three. Get this wrong and everything downstream is wrong.

Step two is the Indian income. Rent from an Indian flat, interest on NRO deposits, capital gains on shares and mutual funds, gains on Indian property. TDS on payments to a non-resident runs under section 195 and is deducted on the gross amount at rates that are frequently far higher than the final liability — which is what a lower or nil deduction certificate under section 197 exists to fix, and why applying for one before the transaction is worth real money.

Step three is not paying twice. India's tax treaties allocate taxing rights and cap the rate on things like interest, dividends and royalties. To use a treaty you need a Tax Residency Certificate from the other country and Form 10F; to claim credit in India for tax paid abroad you need Form 67, filed within the prescribed time.

We also handle the repatriation paperwork — Form 15CA and 15CB — that banks ask for before money leaves India, and the account-type questions (NRE, NRO, FCNR) that decide whether the interest is taxable here at all.