Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Both regimes are open to NRIs
An NRI can choose between the old regime (lower slabs but with deductions) and the new regime (wider slabs, higher basic exemption, but most deductions removed). The new regime is the default; you opt for the old one if it suits you better.
The trade-off
The new regime helps if you have few deductions. The old regime can win if you have significant deductions — though many of these (like 80C investments) are less relevant to NRIs. Remember the 87A rebate is unavailable to NRIs in either regime, and certain NRI restrictions apply. Confirm current slabs before choosing.
A worked example
Example: an NRI with ₹8 lakh of rental income and little to deduct usually pays less under the new regime. One with a let-out property carrying large interest might find the old regime better. Run both before filing — the choice can usually be made each year if you have no business income. If you do have Indian business or professional income, the freedom to switch is restricted: once you move to the old regime you may not be able to flip back freely, so the first choice carries more weight. Because the new regime is now the default, doing nothing means you are taxed under it — which is fine for most NRIs, but worth a deliberate check rather than an accident. Our NRI tax service can compare them for you.