19 Dec 2025Updated: May 2026
NRI Services in India: Tax Filing, TDS on Property, FEMA, Form 15CA/CB, and Advisory
NRIs — whether in the UAE, USA, UK, Canada, Singapore, Australia, or the Gulf — carry ongoing India tax, FEMA, and compliance obligations regardless of how long they have been away. Most discover this only when they sell a property, receive a notice, or try to repatriate funds. By then, the cost of non-compliance can be significant. This post covers the core NRI services in India that every non-resident should understand.
1. NRI Income Tax Filing in India
An NRI is required to file an Income Tax Return in India if their India-sourced income exceeds the basic exemption limit (₹3 lakh under the new regime for FY 2025-26) or if any capital gains arise from assets in India — regardless of amount.
India income for NRIs includes:
- Rental income from property in India (taxable; standard deduction of 30% and municipal taxes deductible)
- Interest on NRO accounts (taxable at applicable rates; TDS deducted at 30% by bank)
- Interest on NRE and FCNR accounts — exempt under Section 10(4) of the Income Tax Act, 1961
- Capital gains on sale of property, shares, mutual funds, or other assets situated in India
- Dividends from Indian companies
The correct ITR form is ITR-2 (no business income) or ITR-3 (business/professional income). Deadline: 31 July for non-audit cases, 31 October for audit cases.
2. TDS on Property Sale by NRI — The Most Critical Step
When an NRI sells property in India, the buyer is legally required to deduct TDS under Section 195 on the full sale consideration — not just the capital gain component. The rates are:
- LTCG (property held >24 months): 12.5% plus applicable surcharge and cess — approximately 14.95% to 15.60% depending on the quantum of gains
- STCG (property held ≤24 months): Slab rate plus surcharge and cess — can reach 30%+ for high-income sellers
The most valuable action an NRI seller can take — and the most commonly skipped — is to apply for a Lower Deduction Certificate (LDC) under Section 197 before the sale is registered. The LDC application to the Income Tax Officer requires a computation of the actual capital gain, cost of acquisition, applicable exemptions (Sections 54, 54EC, 54F), and the resulting actual tax liability. The LDC then instructs the buyer to deduct TDS at the actual liability rate rather than the gross rate. Without an LDC, the buyer deducts TDS on the full consideration, and the NRI must wait 6–12 months to recover the excess through an ITR refund.
3. Form 15CA and Form 15CB for Repatriation of Sale Proceeds
After the property sale, repatriating the proceeds from an NRO account to an overseas bank account requires:
- Form 15CA: Filed online by the NRI on the Income Tax portal, declaring the nature of the remittance, applicable tax rate, and DTAA position
- Form 15CB: Certificate from a Chartered Accountant (required for remittances above ₹5 lakh) confirming the nature of payment, tax deducted, DTAA provisions applied, and ITR compliance status
- Form A2: Bank's own remittance form
The bank will not process an overseas remittance without Form 15CA/CB in place. This is the most document-intensive step and requires a CA who understands FEMA, DTAA, and the Income Tax Act to certify the position correctly.
The FEMA annual repatriation cap from an NRO account is USD 1 million per financial year (after tax). NRE account balances are freely repatriable without limit.
4. FEMA Compliance for NRI Property and Investments
Under the Foreign Exchange Management (Non-Debt Instruments) Rules 2019 and RBI Master Directions on Foreign Investment, NRIs can hold and purchase residential and commercial property in India without prior RBI permission. Agricultural land, plantation property, and farmhouses require RBI approval.
Property purchases must be funded from NRE or NRO accounts or through inward remittances in foreign currency. Purchase from resident savings or foreign credit cards is not permitted. Sale proceeds go into the NRO account, from where they can be repatriated subject to the USD 1 million annual cap.
5. Foreign Asset Disclosure — Schedule FA in ITR
NRIs who are Resident but Not Ordinarily Resident (RNOR) or who return to India and become residents must disclose all foreign assets in Schedule FA of their ITR. This includes foreign bank accounts, overseas property, foreign equity holdings, and interests in overseas entities.
Non-disclosure carries a penalty of ₹10 lakh per undisclosed asset per year under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The penalty applies even if the asset produces no income.
6. DTAA Benefits for NRIs
India has Double Taxation Avoidance Agreements with over 90 countries. NRIs from UAE, Singapore, and Mauritius, among others, may be entitled to exemptions or reduced rates on certain Indian income under the applicable DTAA. To claim treaty benefits, the NRI must:
- Obtain a Tax Residency Certificate (TRC) from the tax authority of the country of residence
- File Form 10F on the Income Tax portal in India
Without a TRC and Form 10F, the DTAA benefit is denied by default, and TDS is deducted at the higher domestic rate.
For comprehensive NRI tax advisory, ITR filing, LDC applications, Form 15CA/CB, and return-to-India planning, visit www.nriblueprint.com. For the complete framework on NRI taxation in India, NRI Tax Blueprint 2025 by CA Regi Tom Antony is available on Amazon.
Regi Tom Antony And Associates is a Chartered Accountant firm in Kakkanad, Kochi, specialising in NRI tax advisory, ITR filing, TDS on property, Form 15CA/CB certification, FEMA compliance, and return-to-India planning. Contact: letstalk@rtaandassociates.com.