NRI Taxation in India — Residential Status, DTAA with the UAE, TDS on Buying Property from an NRI (Form 27Q) and Forms 15CA / 15CB

Everything starts with residential status for the financial year. The basic test is 182 days: an Indian citizen who stays outside India for 182 days or more in the year is a non-resident. There are further rules — the 60-day / 365-day test, the 120-day rule for those with Indian income above ₹15 lakh, and the 'deemed resident' rule for citizens with high Indian income who are not taxed anywhere — so count the days from your passport before you decide. Status is decided year by year.

Money you send from the UAE to India is not income and is not taxed on transfer. The India–UAE Double Taxation Avoidance Agreement, in force since 1993, gives the UAE the right to tax employment income earned there — and the UAE levies no personal income tax — so an NRI's UAE salary is not taxed in India. To claim treaty benefits in India you need a Tax Residency Certificate from the UAE and Form 10F on the e-filing portal.

• •Gifts to relatives are tax-free without limit: spouse, brothers and sisters and their spouses, parents and lineal ascendants and descendants of you or your spouse (section 56(2)(x)). Money sent for living expenses, education, medical treatment or family support is likewise not the recipient's income.
• •Gifts to anyone outside the relative list are taxable in the recipient's hands if they exceed ₹50,000 in aggregate in a year.
• •Income your parents earn by investing the money — FD interest, rent, dividends — is taxable in their hands in the normal way.
• •Use an NRE account for foreign earnings: interest is exempt and funds are freely repatriable. Rent and Indian income go into an NRO account, where interest is taxable.
• •Exchange rates for the ITR follow Rule 115: SBI's TT buying rate on the last day of the month before the salary falls due, and on the date of receipt or accrual for house property, capital gains and other sources.

When a resident buys property from an NRI, section 194-IA's 1% TDS does not apply. Section 195 applies instead: the buyer must deduct tax on the sale consideration at the rate applicable to the seller's capital gain — a long-term gain on property held over 24 months is taxed at 12.5% since 23 July 2024 (20% with indexation before that, which is the rate in the 2023 video), plus surcharge and 4% cess — and deposit it before paying the seller. The seller can apply to the Assessing Officer for a lower or nil deduction certificate under section 197 (Form 13) if the actual gain is small; the buyer then deducts at the certified rate.

Before a bank remits money abroad to a non-resident — a foreign supplier, consultant, landlord, shareholder or relative in certain cases — it asks for Form 15CA, the remitter's declaration filed on the income-tax e-filing portal, and in larger taxable cases Form 15CB, a Chartered Accountant's certificate with a UDIN confirming the tax treatment. Both are filed before the remittance and the acknowledgement is given to the bank.

• •Convert the foreign currency at the exchange rate of the filing date to test the ₹5 lakh aggregate.
• •The nature-of-remittance (purpose) code decides taxability — many payments carry no TDS at all, and the right code saves both TDS and the 15CB fee.
• •The remitter needs a PAN and an e-filing account; the remittee's PAN is entered if it exists so a refund can be claimed later.
• •Verification is by Aadhaar OTP or DSC; the acknowledgement (ARN) goes to the bank.
• •TCS under the Liberalised Remittance Scheme is a separate collection by the bank on personal remittances; the 2026 changes video notes a flat 2% and a ₹10 lakh threshold under the new Act.