What this covers
Taxation of non-residents and returning residents: determining residential status, working out what India can tax and at what rate, claiming treaty relief, handling withholding on Indian income, and repatriating funds. It covers property sales, investment income, salary earned partly in India, and the year of arrival or departure.
Statutory basis
The Income-tax Act, 2025, which came into force on 1 April 2026 and repealed the Income-tax Act, 1961. Residential status is determined by the day-count tests in the new Act, read with its deemed-residence and not-ordinarily-resident provisions; what India may tax turns on that status and on where the income is treated as arising; withholding on payments to non-residents, and the certificate authorising deduction at a lower rate, are provided for in the same Act. Under the repealed Act these were sections 6, 5 and 9, section 195 and section 197, with treaty relief under sections 90 and 90A and the special provisions on investment income of non-resident Indians in Chapter XII-A. A year up to 31 March 2026 is still governed by the old Act.
Who it applies to
Non-resident Indians, foreign citizens with Indian income, residents who have become non-resident during the year or the reverse, and Indian buyers who must withhold tax when they purchase property from a non-resident.
What we do
- 1Count days for the relevant year and each preceding year on the tests the applicable Act sets, and consider the deemed-residence and not-ordinarily-resident provisions.
- 2Separate income India can tax from income it cannot, on the status established and on where each item of income arises.
- 3Apply the treaty where it gives a better outcome, and assemble the Tax Residency Certificate and the prescribed treaty declaration it depends on.
- 4Where property is being sold, compute the gain and advise the buyer on the deduction required on a payment to a non-resident — and where that deduction exceeds the real liability, apply for a certificate authorising a lower rate rather than paying and waiting for a refund.
- 5File the return, claim the foreign tax credit on the form the Income-tax Rules, 2026 prescribe, and reconcile with the tax credit and annual information statements on the portal.
- 6Prepare the certification the bank needs for repatriation.
What you receive
- Status opinion
- A written determination of residential status with the day count behind it, and the Act it was determined under.
- Return filed
- The income-tax return with computation and acknowledgement.
- Certificates
- The lower-deduction certificate or repatriation certification where those apply.
Documents and information required
Passport pages showing arrival and departure stamps for the relevant years · Tax Residency Certificate and the prescribed treaty declaration · details of Indian bank accounts, NRE, NRO and FCNR · property purchase and sale deeds with cost records and improvement bills · broker statements for securities · salary and withholding certificates and the tax credit statement · foreign tax returns and tax paid, if a credit is claimed.
Key dates
The return of income runs on the ordinary due dates for the tax year. An application for a lower-deduction certificate should be made well before the transaction, since it takes time to process and the buyer cannot wait — for a property sale, start it before the agreement is signed. A return or certificate for a year up to 31 March 2026 is dealt with under the provisions that applied then.