Is income earned in my NRI account subject to taxes?
Yes, any income generated from your NRI account through transactions in India is subject to taxation under the provisions of the Income Tax Act, 1961. According to Section 5 of the Act, income that accrues or arises in India, or is received in India, is taxable for all individuals, including Non-Resident Indians (NRIs).
What types of income are taxable?
| Income type | Tax applicability |
|---|
| Capital gains (Equity & F&O) | Taxed based on holding period and segment (Short-Term/Long-Term) |
| Dividends | Subject to TDS before credit |
| Interest on NRO account | Taxable in India |
| Interest on NRE account | Generally exempt from tax in India |
| Rental income | Taxable under income from house property |
| Business or other income | Taxed based on applicable slab or section |
What if...
| Scenario | What you should know |
|---|
| You’re unsure about your total tax liability | Consult a tax advisor familiar with NRI taxation and DTAA treaties |
| You hold both NRE and NRO accounts | Income in NRO is taxable; NRE interest is usually exempt |
| You received income from mutual funds | Taxed based on fund category (equity/debt) and holding period |
FYERS does not provide tax advice. Always consult a licensed tax consultant for guidance specific to your income and country of residence.
Last updated: 25 Jun 2025
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