Taxation in India can often feel complex—more so for Non-Resident Indians (NRIs) managing assets and income across borders. Whether you’re renting out property in India, earning interest from Indian bank accounts, or selling inherited assets, understanding the latest income tax slabs is essential. This article simplifies the tax structure for NRIs for Financial Year 2024–25 (Assessment Year 2025–26), so you can plan better and avoid surprises.

Who Qualifies as an NRI for Tax Purposes?

An individual is classified as a Non-Resident Indian (NRI) under Indian tax law if they:

• Spent less than 182 days in India during the financial year, or
• Spent less than 60 days in India in that year and less than 365 days in the preceding four years.

Only the income earned or accrued in India is taxable for NRIs. Foreign earnings are not subject to Indian tax.

Income Tax Regimes: Choose Wisely

As an NRI, you can opt between two tax regimes:

1. New Regime (with lower tax rates but fewer deductions)
2. Old Regime (with higher rates but allows for various exemptions and deductions)

Let’s look at the structure of both.

New Tax Regime for FY 2024–25

This regime offers concessional rates but limits common deductions (e.g., Section 80C, HRA, LTA). Below are the applicable tax slabs:

Key Notes for NRIs:

• Rebate under Section 87A (₹25,000 for incomes up to ₹7,00,000) is not available to NRIs.
• Standard deduction of ₹75,000 is allowed for salaried individuals.
• Family Pension: Deduction of up to ₹25,000 is permitted.
• NPS (Employer’s Contribution): Up to 14% of basic salary is deductible.

Surcharge is capped at 25%, which is lower than the old regime’s 37%.

Old Tax Regime for FY 2024–25

Under this regime, you can claim various deductions (80C, 80D, HRA, etc.). However, tax rates are higher:

Note: For NRIs, senior citizen benefits (higher exemption limits) do not apply, regardless of age.

Surcharge and Cess

In both regimes, additional levies are applicable:

Surcharge:

• • 10% on income ₹50 lakh – ₹1 crore
  • 15% on ₹1 crore – ₹2 crore
  • 25% on ₹2 crore – ₹5 crore
  • 37% on income exceeding ₹5 crore (Old Regime Only)

Health & Education Cess: 4% on the total tax (including surcharge)

How can one choose between the two regimes?

Here’s a simple guide:

Evaluate both regimes using online calculators or consult a tax advisor to make the optimal choice.

Special Considerations for NRIs

• No Rebate under Section 87A: Unlike residents, NRIs don’t benefit from tax rebates on lower incomes.
• Interest from NRE and FCNR Accounts: Tax-free in India.
• Interest from NRO Accounts: Fully taxable.
• Rental Income from Indian Property: Taxable after standard deductions.
• Capital Gains from Indian Assets: Subject to short-term or long-term capital gains tax.

Conclusion

Understanding the applicable income tax slabs and choosing the right tax regime can lead to significant savings for NRIs. While the new regime offers simplicity and lower rates, the old regime might still be beneficial for those with sizable deductions. Consider your income sources, investment patterns, and eligibility for exemptions before making a decision.

For tailored advice, especially if you have income across multiple countries, consult a qualified tax professional.