Based upon his/her residential status for the year, the income taxes are levied.
- If your status is ‘resident’, then your global income is taxable in India.
- If your status is ‘Non – Resident’, then your income which is earned or accrued in India is taxable in India.
- Salary received in India or salary for service provided in India, income from a house property situated in India, capital gains on transfer of asset situated in India, income from fixed deposits or interest on savings bank account are all examples of income earned or accrued in India. These incomes are taxable for an NRI.
- Income which is earned outside India is not taxable in India. Interest earned on an Non Resident Rupee (NRE) account and Foreign Currency Non-Repatriable (FCNR) account deposits account is tax-free.
- Interest on Non Resident Ordinary Rupee (NRO) account is taxable for an NRI.