# Foreign Income Tax Estimator

> If you are resident and ordinarily resident in India, foreign salary, rent, interest, dividends and capital gains are all taxable here, with credit for tax paid abroad. NRIs and RNORs are not taxed on foreign income. Residents must also disclose foreign bank accounts, shares, property and other assets in Schedule FA every year — even if they earned nothing from them.

Interactive calculator: https://www.industax.com/calculators/foreign-income-tax

- **Residents (ROR):** Taxed on worldwide income
- **NRIs and RNORs:** Indian income only
- **Foreign assets:** Report in Schedule FA

## How foreign income is taxed

| Income | Indian tax treatment for residents |
| --- | --- |
| Foreign salary | Salary income at slab rates; credit for foreign tax |
| Foreign rent | House property income — 30% standard deduction, local taxes paid abroad deductible |
| Interest and dividends | Other sources at slab rates |
| Foreign shares and RSUs | Capital gains — 24 months for long-term (unlisted in India), 12.5% LTCG |
| Foreign mutual funds | Typically taxed as non-equity — at slab rates or 12.5% LTCG depending on holding and type |

## Schedule FA and the Black Money Act

Schedule FA covers foreign assets held at any time in the calendar year ending during the tax year. Non-disclosure can attract a ₹10 lakh penalty under the Black Money Act; since October 2024 that penalty doesn't apply where the total value of foreign assets other than immovable property is ₹20 lakh or less, but disclosure is still required.

## Worked example: returning professional with US RSUs

1. Resident (ROR) holding US RSUs that vested while working in India: perquisite tax at vesting, then capital gains on sale.
2. Sold shares held for 30 months for a gain of ₹10 lakh — long-term (more than 24 months for foreign shares).
3. LTCG at 12.5% = ₹1,25,000 plus cess; claim credit for any US tax on the sale.

**Result:** ≈ ₹1.3 lakh of Indian tax, and the shares must appear in Schedule FA.

## FAQs

### Do I need to report a foreign bank account with a small balance?

Yes, if you are resident and ordinarily resident. Schedule FA has no minimum balance; every foreign account held during the calendar year must be reported.

### Is foreign income taxable in the year I return to India?

Usually not, if you qualify as non-resident or RNOR that year. Plan the timing of foreign income and asset sales around your RNOR window.

### How do I convert foreign income into rupees?

Generally at the SBI telegraphic transfer buying rate on the last day of the month preceding the month in which the income is received or deemed received.

## Official sources

- Income Tax Department: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/calculators/foreign-income-tax
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.