NRI Income Tax Slabs & Rates for 2025

Income Tax Rates for AY 2025-26 for NRIs

Given below are the various tables for the latest Income Tax Slabs for the FY 2023-2024:

New Income Tax Slab for Individual (New Regime)

Note: New income tax rates are optional

Income Tax Provisions for NRIs

Based upon a set of specific guidelines and directives, it can be ascertained if a person is actually an NRI. Based upon that, income earned in India can be considered as taxable income.

It is important to understand that the income earned by an NRI outside India will not fall under the jurisdiction of the Income Tax Act. However, if his/her income in India through aspects like capital gains from investments in shares, mutual funds, property rental and term deposits exceed the basic exemption limit as defined in the Income Tax Act, he/she would have to file a tax return.

Income tax for non-resident Indians differs from the income tax charged for resident Indians, that difference lies in the taxation slabs.

The major points concerning NRI taxation can be outlined as follows:

1. Income tax slabs for NRIs are based only on the income barring any gender, age or other specification
2. In case of TDS, all incomes of NRIs are charged irrespective of any threshold value
3. No nominal deductions are applicable on investment income except under specific situations
4. Efiling income tax isn't normally required for NRIs if the income is subject to clauses under Section 115G of the Income Tax Act

Some specific provisions exist as per the Income Tax Act which relate how income tax would be charged for an NRI.

The brief of such provisions are mentioned below:

1. Section 115D: Computation of Tax
2. Section 115E: Tax on income from investment and long term capital gains
3. Section 115F: Non chargeable capital gains on transfer of foreign exchange assets in certain cases - Dealing with exceptions where the transfer of a foreign exchange asset will not incur any tax
4. Section 115G: Non-filing of returns of income in specific cases
5. Section 115H: Benefits of taxation after an NRI becomes a resident
6. Section 115I: Non-application of provisions for NRI taxation

All the above rules are subject to change as per the discretion and direction of the Central Government and the Income Tax Department of India.

Applicable Deductions and Exemptions for NRIs

Most of the income of NRIs gets subjected to a heavy TDS (Tax Deducted at Source) and that often leads to NRIs paying more tax than they are normally liable for. Thus, knowing the applicable deductions and exemptions that can be availed is important.

The deductions that are allowed for an NRI are as follows:

1. Section 80C
   1. Life insurance premium payment
   2. Tuition fee payment
   3. Principal payment on loan for purchase of house property
   4. Investment in ULIPs
   5. Deduction from House Property Income
2. Section 80D
   1. Premiums of health insurance of the immediate family and dependents.
   2. Up to a maximum of Rs. 5000 for preventive health check-ups.
3. Section 80E: Deduction of interest paid on an education loan for the higher education of self, spouse, children or a dependent student subject to the earlier of a period of 8 years or till the interest is paid.
4. Section 80G: Donations as per Section 80G.
5. Section 80TTA: Maximum of Rs.10,000 on interest from savings bank account.
6. Long term capital gains from property held for 36 months or more can be invested in another property and the amount used in the transaction will be exempted.