Yes, a Non-Resident Indian (NRI) can get a Tax Deducted at Source (TDS) refund if the TDS deducted on income (such as property sales, rent, or investments) exceeds their actual tax liability in India. To claim the refund, an NRI must file an Income Tax Return (ITR) in India by the July 31st deadline.
To claim a refund of the TDS Deducted, the NRI would be required to file an income tax return in India after the end of the financial year. While filing the Income Tax Return, the NRI would be required to self compute his income and the income tax liability as per the slab rates.
Tax is often deducted at source (TDS) from your salary, interest, or other income. If the amount deducted exceeds your actual tax liability, you are eligible for a refund. Knowing the correct procedure can help you claim your refund without delays.
Claiming a refund as an NRI involves confirming your NRI status under Section 6, calculating your taxable Indian income including interest, rent, or capital gains, verifying TDS entries in Form 26AS, filing the appropriate ITR (ITR-2 or ITR-3), completing e-verification, and tracking the refund via the Income Tax ...
Understanding TDS Refund on Salary
A TDS refund is applicable when the tax deducted at source (TDS) by your employer exceeds your actual tax liability for the financial year. For example, if your total tax payable is ₹20,000 but your employer deducts ₹25,000, you are eligible for a TDS refund of ₹5,000.
In case your taxable income is below the basic exemption limit, you can avoid TDS deduction from your salary. If the actual tax payable is less than the TDS, you must file Income Tax Return (ITR) to claim TDS refund. While filing the ITR online, you need to provide the details of a bank account and IFSC code.
The latest date, by law, you can claim a credit or federal income tax refund for a specific tax year is generally the later of these 2 dates: 3 years from the date you filed your federal income tax return, or. 2 years from the date you paid the tax.
TDS Rates for NRIs
30% for interest earned on non-resident ordinary (NRO) accounts and deposits. 10% for long-term capital gains (LTCGs) on equities. 15% for short-term capital gains (STCGs) on equities. 30% for STCGs from debt (non-equity) mutual funds.
NRIs have to pay income tax in India for the total income they earn in the country in a particular financial year if it exceeds the exempted limit of ₹ 2.5 lakhs. Even if the income is less than the exempted limit, they must file a tax and claim a TDS refund on their NRO account.
New rules for NRIs in India focus on stricter tax residency criteria from April 2026, increasing the stay threshold to 120 days for high-income NRIs (over ₹15 lakh Indian income) to become Resident but Not Ordinarily Resident (RNOR) and introducing "deemed residency" for high-income Indians in tax havens; also, higher TCS thresholds for LRS remittances (to ₹10L) and removal of TCS for education loans are recent changes from Budget 2025-26, alongside increased reporting of foreign assets.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
TDS Filing Software: Avoid These 7 Common Mistakes for Accuracy
So, an NRI owner can claim a refund of excess TDS levied if the actual tax liability is lower. The process of claiming the refund for excess TDS is: Get Form 16A from your residential tenant as a certificate of TDS collection and deposit to the government.
Based on the nature of taxable income, NRIs must pay TDS within a 10% to 30% range. NRIs are often subject to more stringent tax rules than the residents. To transact in India, they are required to have a valid PAN, which refers to a 10-character alphanumeric number allocated by the taxation department to taxpayers.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
While filing your ITR, the system automatically calculates your refund based on your income, deductions and TDS details. Ensure all income sources, such as salary, interest, rent, fees, and capital gains, are reported correctly. Enter the TDS amounts exactly as they appear in Form 26AS and AIS.
Answer: Yes, such acceptance of deposit and refunds, if required, will be covered under current account transactions and can be made freely without any restriction from FEMA perspective.
TDS returns are filed quarterly within 15 days (next month of quarter end). Once the TDS returns are filed in the 27Q form for TDS return, the buyer can issue TDS certificate (Form 16A) to NRI seller. This TDS certificate should be issued within 15 days to the seller from the due date of TDS returns for the quarter.
NRIs can send tax-free gifts to relatives in India, but gifts to non-relatives over ₹50,000 annually may be taxable for the recipient under Indian tax law. This makes inward remittance a tax-efficient way to manage your overseas earnings.
How to Claim TDS Refund
The TDS payment due date is usually the 7th of the next month (30th April for March). TDS return filing is due by the last day of the month following each quarter (31st July, 31st October, 31st January, and 31st May).
You must offer a refund to customers if they've told you within 14 days of receiving their item that they want to cancel. They have another 14 days to return the item once they've told you. You must refund the customer within 14 days of receiving the item back. They do not have to provide a reason.