Exempt Income for NRIs
Which categories of income are exempt from Indian tax for a Non-Resident Indian, and how to claim them correctly in your return.
Common exemptions available to NRIs include interest on NRE and FCNR deposits while non-resident status is maintained, certain long-term capital gains reinvested under sections 54, 54EC and 54F, and specified income exempt under section 10 such as certain allowances. Interest on an NRO account is not exempt and is taxable, typically with TDS deducted at source. Exemptions must still be correctly disclosed in the return, even where no tax is payable on them.
Exemptions we commonly review for NRI clients
Exempt income is often missed or wrongly reported, either overstating exemption or failing to claim what is genuinely available.
- NRE and FCNR account interest exemption, subject to maintaining non-resident status
- Capital gains exemption on reinvestment under sections 54, 54EC and 54F
- Specified allowances and income exempt under section 10
- Correct treatment where status changes from NRI to resident mid-year
- Distinguishing NRE (exempt) from NRO (taxable) interest on the same statement
- Reporting exempt income in the correct schedule of the ITR
What this service includes
How we help you with your exempt-income position.
Exemption Eligibility Review
Checking which of your income streams genuinely qualify for exemption.
Capital Gains Reinvestment Planning
Structuring a property sale to make the most of sections 54/54EC/54F.
NRE/NRO Interest Segregation
Separating exempt NRE interest from taxable NRO interest accurately.
Schedule EI Reporting
Reporting exempt income correctly in the relevant schedule of your ITR.
Our process
From initial consultation to completion.
Income Source Mapping
Listing every India-linked income stream and its account source.
Exemption Eligibility Check
Testing each stream against the applicable exemption conditions.
Reinvestment/Compliance Planning
Advising on timelines and asset choices to preserve capital gains exemption.
Correct Return Reporting
Reporting exempt income in the right schedule so it's on record, not just omitted.
Why exempt income still needs careful handling
What sets our approach apart.
NRE exemption ends the moment status changes
Interest that was exempt as an NRI can become taxable the year you become resident.
Reinvestment exemptions have strict timelines
Sections 54, 54EC and 54F all carry specific windows that are easy to miss without planning.
Wrongly claimed exemption invites scrutiny later
Getting the classification right upfront avoids questions in a later assessment.
your exempt-income position questions answered
What people ask before engaging us.
Ready for expert help with your exempt-income position?
Let our team help you navigate this process with clarity and confidence.
