Quick answer
An NRI can avoid paying tax twice on the same income by claiming relief under India's Double Taxation Avoidance Agreement (DTAA) with the country of residence. Under the Income-tax Act, 2025, you need a Tax Residency Certificate and Form 41 (which replaced Form 10F), and you can reduce TDS in advance with a lower-deduction certificate on Form 128.
Key takeaways
- Your residential status decides what Indian income is taxable; NRIs pay tax only on income earned or received in India.
- DTAA relief needs a Tax Residency Certificate and Form 41 (formerly Form 10F).
- Excess TDS on rent, interest or property sales can be cut in advance with a lower deduction certificate (Form 128).
- From 1 October 2026, resident individuals buying property from NRIs no longer need a TAN.
Table of contents
Many Keralites working in the Gulf, the UK and elsewhere still earn income in India: rent from a house in Kochi, interest on NRO deposits, dividends or capital gains. Without planning, that income can be taxed twice, in India and in the country where you live. India’s Double Taxation Avoidance Agreements (DTAAs) with more than 90 countries prevent this.
Step 1: confirm your residential status
Residential status, under section 6 of the Income-tax Act, 2025, decides what India can tax:
- 182 days or more in India in the tax year makes you resident.
- For citizens and persons of Indian origin visiting India with Indian income above ₹15 lakh, a 120-day test also applies.
- A citizen with Indian income above ₹15 lakh who is not liable to tax in any other country may be a deemed resident (RNOR).
As an NRI, you pay Indian tax only on income earned or received in India.
Step 2: use the DTAA
A DTAA can lower the Indian tax rate on interest, dividends, royalties and fees, or give you credit in your country of residence for Indian tax paid. To claim it in India you need:
- A Tax Residency Certificate (TRC) from your country of residence.
- Form 41, which replaced Form 10F under the Income-tax Rules, 2026.
- Your PAN.
Gulf countries such as the UAE have no personal income tax, so check the treaty and your TRC eligibility before relying on DTAA relief.
Step 3: avoid excess TDS
Indian payers deduct TDS on NRI income at high rates, often on the gross amount. You can apply on TRACES for a lower or nil deduction certificate (Form 128, formerly Form 13), especially before selling property. From 1 October 2026, resident individual buyers no longer need a TAN to deduct TDS on property bought from an NRI, which makes the sale simpler.
Step 4: file your return
File an Indian return to claim refunds of excess TDS, carry forward losses and keep a clean record for future property sales or repatriation.
We help NRIs across the Gulf and the UK with returns, DTAA claims and lower deduction certificates. See our NRI tax services.
Sources: Income Tax Department FAQs on the Income-tax Rules, 2026 forms; Budget Speech 2026-27. Form numbers are as notified under the Income-tax Rules, 2026.
Frequently Asked Questions
01.Who is an NRI for income tax?
Broadly, an Indian citizen is non-resident if they spend less than 182 days in India in the tax year. If Indian income exceeds ₹15 lakh, the second test uses 120 days, and a citizen with Indian income above ₹15 lakh who is not taxable in any other country can be treated as a deemed resident.
02.What documents do I need to claim DTAA benefits?
A Tax Residency Certificate from the tax authority of your country of residence, Form 41 (which replaced Form 10F under the Income-tax Rules, 2026) and your PAN.
03.Can I reduce TDS on the sale of my property in India?
Yes. Apply for a lower or nil deduction certificate on Form 128 (formerly Form 13) before the sale, showing the actual capital gain. Without it, the buyer must deduct TDS on the full sale value.
04.Is interest on NRE accounts taxable?
Interest on NRE accounts is exempt in India while you remain a non-resident. Interest on NRO accounts is taxable and subject to TDS, which a DTAA may reduce.
