Is NRE interest taxable in India?

No. Interest on NRE and FCNR deposits is exempt for NRIs. NRO interest is taxable.

Can an NRI get a TDS refund?

Yes, by filing an ITR showing that the final tax is lower than the TDS already deducted.

NRI Tax answer

Does an NRI need to file an income tax return in India?

Yes, if the NRI's taxable income in India for the year is above the basic exemption limit — ₹4 lakh under the new tax regime or ₹2.5 lakh under the old regime for FY 2025-26. NRIs should also file to get back excess TDS (common on property sales and NRO interest) or to carry forward capital losses, even when their income is below the limit.

Last reviewed: 2026-10-08•Category: NRI Tax

Detailed answer

India taxes an NRI only on income earned or received in India: rent from Indian property, NRO interest, capital gains on Indian assets, dividends from Indian companies, and pay for work done in India. Foreign income is not taxed in India for an NRI. Interest on NRE and FCNR deposits is exempt.

The Section 87A rebate is only for residents, so an NRI does not get the rebate that makes income up to ₹12 lakh tax-free for residents under the new regime.

Form: ITR-2, or ITR-3 if there is business or professional income. For FY 2025-26 the non-audit due date was 31 July 2026; a belated return can be filed until 31 December 2026 with a late fee.

Source and citation links

Income Tax e-Filing portal

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