NRI Taxation Under the Income-tax Act 2025: What Changed, What Didn't

India's new income-tax law is in force from 1 April 2026, and NRI inboxes are full of alarming summaries. Here is the calm version: your residential status rules did not change, your capital-gains rates did not change, and your treaty relief did not change. What changed is the paperwork — new form numbers, new section numbers — and one transition rule about which Act governs which year. This guide covers exactly what an NRI needs to know.

First, the transition rule

The Income-tax Act, 2025 applies to income earned from tax year 2026-27 onwards (from 1 April 2026). The return you file during 2026, for FY 2025-26 income, is still governed by the 1961 Act — old sections, old forms. Your first new-Act return is filed in 2027. The full background is in our pillar guide to the Income-tax Act 2025 vs the 1961 Act.

Residential status: nothing moved — not even the section number

Residency is the heart of NRI taxation, and the 2025 Act carries it over intact. It even keeps the old number: Section 6. The tests, applied to the tax year (1 April to 31 March):

• The 182-day rule. You are resident if you spend 182 days or more in India in the tax year.
• The 60 + 365 rule. Also resident if you spend 60 days or more in the year and 365 days or more across the preceding four years.
• The concession for NRIs visiting India. For Indian citizens leaving for employment or as crew, and for NRIs/PIOs visiting India, the 60-day limb reads as 182 days. But where a visiting NRI/PIO has India-sourced income above ₹15 lakh, the threshold is 120 days — and a stay of 120 to 181 days makes you RNOR, not fully resident.
• Deemed residency. An Indian citizen with India-sourced income above ₹15 lakh who is not liable to tax in any other country is deemed resident — with RNOR status.
• RNOR. The resident-but-not-ordinarily-resident categories continue: non-resident in 9 of the 10 prior years, or 729 days or fewer in India across the prior 7 years, plus the two cases above. RNOR status still shields most foreign income from Indian tax.

All of this is carried over from the 1961 Act (as it stood after the Finance Act 2020 changes). If your day-count planning worked last year, it works this year. Only the label changed: you now count days in a "tax year" rather than a "previous year" — the same 12 months, as explained in our guide to the new tax year.

The new form names every NRI will meet

From 1 April 2026 the compliance documents follow the new Act. Three matter most to NRIs:

Old form	New form	When an NRI uses it
Form 13	Form 128	Applying for a lower / nil TDS certificate (now under s.395) — typically before selling property in India
Form 15CA / 15CB	Form 145 / 146	Repatriating money abroad; Form 146 is the CA certificate where taxable remittances exceed ₹5 lakh in the year
Form 10F	Form 42	Claiming DTAA treaty relief, filed electronically alongside your Tax Residency Certificate

Also relevant: Form 16 (salary TDS certificate) becomes Form 130, and Form 26AS (your annual tax statement) becomes Form 168. Old 15CA/15CB certificates for remittances completed on or before 31 March 2026 remain valid — no re-filing needed.

TDS sections: renumbered, not rewritten

The 1961 Act scattered TDS across the 194-series and Section 195. The 2025 Act consolidates everything non-salary into one table-based provision, Section 393. For NRIs:

• Payments to non-residents — property sale proceeds, rent, dividends, interest — fall under Sections 393(2)/(3) (old 195), at the rates in force.
• The harsh rule survives: when a buyer purchases property from an NRI seller, TDS applies on the full sale consideration, with no ₹50 lakh threshold — unless a lower-TDS certificate is in hand.
• Lower/nil deduction certificates move from Section 197 to Section 395, applied for on Form 128. The process and timelines are unchanged; we walk through them in our guide to the lower / NIL TDS certificate for NRI property sales.
• Salary TDS (for NRIs with Indian employment income) sits in Section 392 (old 192).

For the complete cross-reference of sections and forms, see the old vs new mapping table.

Capital gains: full continuity

The rates NRIs care about were set by the Finance (No. 2) Act 2024, effective 23 July 2024, and the 2025 Act carries them forward unchanged:

• Property and unlisted shares: long-term after 24 months; LTCG at 12.5% without indexation. Short-term gains at slab rates.
• Listed equity and equity mutual funds: long-term after 12 months; 12.5% on gains above the ₹1.25 lakh annual exemption; STCG at 20%.
• Reinvestment exemptions survive with new numbers: old 54 (buy another residence) is now Section 82; old 54EC (specified bonds, ₹50 lakh cap) is Section 85; old 54F is Section 86.
• One nuance carried over: the 20%-with-indexation grandfathering option for pre-23-July-2024 land and buildings is available only to resident individuals and HUFs — it was never available to NRIs, and the new Act does not change that.

Most of what an NRI needs to do differently under the new Act fits on a sticky note: quote the new form numbers, and remember that 2026's return is still the old Act.

Returning to India? RNOR planning survives intact

For NRIs planning a move back, the most valuable feature of the old law carries straight over. The RNOR window — available while you were non-resident in 9 of the 10 prior years, or spent 729 days or fewer in India across the prior 7 years — continues under the 2025 Act with the same arithmetic. During RNOR years, most foreign-sourced income stays outside Indian tax, which makes the sequencing of a return to India a genuine planning exercise: when to move, when to redeem foreign assets, when foreign salary or pension starts being earned. Nothing in the new Act shortens or weakens that window. The only change is vocabulary: you will test the conditions against tax years rather than previous years.

Treaty relief and repatriation: same substance, new citations

DTAA relief moves from Sections 90/90A to Section 159. The working requirements are familiar: a Tax Residency Certificate from your home country, plus Form 42 (old 10F) filed electronically — non-PAN non-residents can register on the portal without a PAN — and, in practice, a no-PE declaration where relevant. Dividend TDS for non-residents remains 20% plus surcharge and cess under the Act, with treaties typically bringing it to 5–15%.

On repatriation, the USD 1 million per financial year route for NRO balances is a FEMA scheme and continues untouched; only the income-tax certificates renamed (145/146). Current income — rent, dividends, pensions — remains remittable in addition.

A common transition question here: what about remittances that straddle 1 April 2026? The rule is by completion date. Remittances completed on or before 31 March 2026 stand on their old 15CA/15CB filings — nothing needs re-doing. Remittances made from 1 April 2026 onwards use Forms 145/146, even if the underlying transaction (a property sale, a deposit maturity) happened earlier. Your bank's forms desk will ask for the new numbers; the substance of what the CA certifies is the same.

What an NRI should actually do in 2026

• File the FY 2025-26 India return as usual — old Act, old forms, normally by 31 July 2026.
• Keep counting days exactly as before. The 182/120-day arithmetic and RNOR planning are unchanged.
• Selling property? Apply for the certificate on Form 128 (not Form 13) well before closing — budget four to eight weeks.
• Remitting money after 1 April 2026? Your bank will ask for Forms 145/146, not 15CA/15CB.
• Claiming treaty rates? Refresh your TRC and file Form 42 for the new tax year.

Cross-border situations rarely fit a checklist perfectly — dual residency years, a sale and a repatriation in the same season, RNOR windows worth using deliberately. Our NRI desk handles residency, TDS certificates, remittances and India returns end to end, across both the old and new Acts.

Planning a sale, a remittance or a return to India this year? Write to the firm — the NRI desk will respond with the steps for your situation.