Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The basic exemption
An NRI’s tax-free slab is the basic exemption limit — ₹2.5 lakh (old regime) or ₹4 lakh (new regime) for FY 2025-26. Indian income above this is taxable, and you must file a return. Confirm current limits per the Finance Act.
No 87A rebate for NRIs
Residents effectively pay no tax up to a much higher figure because of the Section 87A rebate — but that rebate is not available to NRIs. So an NRI with income above the basic exemption pays tax on it, even at levels where a resident would owe nothing. There is also no higher senior-citizen exemption for NRIs.
A worked example
Example: an NRI with ₹6 lakh of Indian rental income pays tax on the slab above the exemption — a resident on the same income might pay nil after 87A, but the NRI cannot. Even below the limit, filing is often worth it to reclaim TDS. One more difference to keep in mind: the basic exemption cannot be set against certain special-rate incomes for an NRI — long-term capital gains, for instance, are taxed from the first rupee, so you cannot shelter a property gain under the ₹2.5 or ₹4 lakh slab the way you might assume. Plan around that when estimating your liability. Our NRI tax service can compute and file it.