NRIs & Foreign Income

Your file lives between two tax systems.
We make sure neither one surprises you.

For NRIs in the Gulf, US, UK, Singapore, Australia — and Indian businesses with foreign subsidiaries. FEMA, DTAA, foreign company structures, transfer pricing, repatriation, residency planning. The full cross-border CA practice in one place.

Active NRI Clients120+ Across 8 Countries
DTAA Refunds Filed₹3.4 Cr+ Recovered
Foreign Subsidiaries Set Up15+ WOS / Subsidiaries
Time Zones ServedGulf · US · UK · APAC
Who This Page Is For

If your file crosses borders — keep reading.

01

The Salaried NRI

Working in Dubai, Singapore, US, UK. Salary abroad, ESOPs / RSUs / RSAs from foreign employer, Indian rental property, mutual funds at home. You need ITR + DTAA + Schedule FA done right.

02

The Returning NRI

Moving back to India after 5-10 years abroad. RNOR window planning, foreign asset declaration, ESOP exercise timing, capital gains on foreign holdings. The 24-month transition window decides your next 3 years of tax.

03

The Entrepreneur Going Global

Setting up US LLC, UK Ltd, Singapore Pte, or UAE FZ company — with FEMA implications, ODI filings, transfer pricing for Indian operations, and DTAA structuring.

04

The Foreign Co. With Indian Ops

Foreign parent, Indian subsidiary or branch — needs transfer pricing study, Form 3CEB, master file, country-by-country reporting if applicable, and ongoing FEMA compliance.

The Anchor Decision

Residency status — the first decision, and the most expensive to get wrong.

Your residency status determines what India taxes you on, how much, and at what rate. Get it wrong and you either pay tax twice (on income already taxed abroad) or you pay tax in the wrong country (and face penalties when the mismatch surfaces). This decision is made every financial year — and the test is more nuanced than the 182-day rule alone.

Status
How you qualify
What India taxes
Resident (ROR)
Stay in India ≥ 182 days in FY, OR ≥ 60 days in FY + ≥ 365 days over previous 4 FYs. Plus resident in 2 of the last 10 FYs and ≥ 730 days in last 7 FYs.
Worldwide income — Indian + foreign salary, foreign rental, foreign dividends, foreign capital gains, all reported. DTAA relief available where applicable.
RNOR (transitional)
Resident as per the day-count test, but failed one or both of the "ordinarily resident" tests above. Common for returning NRIs in the first 2 financial years after return.
Indian-source income only — foreign salary, dividends, gains earned during abroad period are not taxed. Massive value during the transition window.
NRI (Non-Resident)
Less than 182 days in India in the FY, and not meeting the 60-day + 365-day combined test. Also: Indian citizens earning foreign income with Indian visits under specified limits.
Indian-source income only — Indian salary, rent from Indian property, capital gains on Indian assets, FD interest. Foreign income is not taxed.

Three real situations where the wrong status assessment cost lakhs.

!

Returning NRI declared ROR in Year 1 — RNOR benefits lost. A US-returning client filed as Resident in his first FY back in India. RNOR status was applicable but missed. Consequence: $80K of US capital gains (already taxed in US) got reported and partly taxed again in India. Could have been entirely outside Indian tax net.

Cost: ~₹14 L additional Indian tax
!

NRI status assumed despite 60-day + 365-day trigger. A Dubai-based founder spent 100 days in India during the year, plus had been visiting often over the previous 4 years totalling 380 days. Combined test triggered Resident status. He filed as NRI. Reassessment notice + interest + penalty.

Cost: ₹4.5 L tax + 1.5 L penalty
!

Foreign assets not disclosed in Schedule FA. Resident with US 401(k), brokerage account, and ESOP holdings missed Schedule FA in ITR. Triggered under Black Money Act. Penalty under Section 43 of BMA = ₹10 L per failure. Schedule FA non-disclosure is a separate offence regardless of whether tax was due.

Cost: ₹10 L+ statutory penalty

If you are returning to India, planning a long visit, or unsure about your status — book a 60-minute residency review → Done before March 31 of the FY, the savings are real. Done after, options narrow.

Services

The full cross-border CA stack.

Every cross-border line item — from a routine NRI ITR to an outbound subsidiary structuring — handled by the same practice.

NRI Income Tax Return FilingITR-2 / ITR-3, Indian-source income, Schedule FA, foreign tax credit (Form 67), DTAA relief.
Residency Status AssessmentDay-count tracking, RNOR window planning for returning NRIs, structuring of India visits to remain non-resident.
DTAA Relief & Form 67Tax treaty relief on foreign salary / dividends / capital gains. Form 67 filing for foreign tax credit. Tax Residency Certificate co-ordination.
Lower TDS Certificate (Section 197)Application before property sale or other Indian-source transactions to reduce TDS — saves cash flow and avoids 12-month refund wait.
NRO / NRE / FCNR Account AdvisoryAccount selection, repatriation rules, interest taxability, FEMA reporting on inflows / outflows.
Repatriation — NRO to Foreign AccountForm 15CA / 15CB certification, USD 1M annual limit advisory, RBI/AD bank documentation.
Schedule FA — Foreign Asset Reporting401(k), foreign brokerage, ESOPs, foreign property, foreign trust beneficial ownership — disclosed correctly to avoid Black Money Act exposure.
Capital Gains on Indian AssetsSale of property, mutual funds, equity shares as NRI — TDS computation, indexation, exemptions u/s 54/54F/54EC, repatriation pathway.
Foreign Subsidiary / WOS SetupUS LLC, UK Ltd, Singapore Pte, UAE FZ, Mauritius / Dutch holdco — entity selection with FEMA-compliant ODI structure.
Transfer Pricing — Form 3CEBTP study, benchmarking, master file, country-by-country reporting (where applicable). For Indian companies billing related parties abroad.
FEMA Compliance & CompoundingODI / FDI reporting, Annual Performance Report (APR), past defaults compounding before RBI.
Returning NRI PlanningRNOR transition window structuring, ESOP exercise timing, foreign asset disclosure, US/UK pension treatment in India.
How We Work

Built for time-zone difference and document trust.

01

Initial Consult Across Time Zones

Early-morning IST for Gulf clients, late-evening IST for US clients. 30-60 minute call, often free for first-time NRI consultations.

02

Secure Document Collection

Encrypted cloud upload — no email back-and-forth with passport / Aadhar / financial data. We provide a checklist; you upload once.

03

Same Senior CA — Year After Year

The CA who handled your first ITR is the same CA on your residency call three years later. Continuity matters when you live abroad and cannot drop in.

04

Tax Calendar Shared in Advance

Annual deadline calendar emailed in March — ITR, advance tax, foreign asset reporting dates. You plan around it, not chase it.

Why NRIs Choose Pujara & Co

What you actually get — that a domestic-only CA cannot give.

Direct DTAA experience across 8+ jurisdictions

US, UK, UAE, Singapore, Australia, Canada, Germany, Netherlands. We have filed DTAA refund claims, Form 67s, and TRC-supported relief for clients across all of them. No "let me check the treaty" — we know which articles apply.

FEMA-trained team — every transaction reviewed

FEMA penalties are not on the income — they are on the transaction. ODI without APR, late FC-GPR, missed Form 15CA/CB — all compoundable but expensive. We pre-clear every cross-border transaction.

RNOR window planning that actually saves tax

Most CAs file the ITR for returning NRIs without checking RNOR eligibility. We map the 7-year and 10-year tests, structure the year of return, and document RNOR status defensibly. That single check has saved clients ₹10-50 L individually.

Available on your time zone

7am IST calls for UK clients before they start work. 9pm IST calls for US East Coast clients after their business day. We are not a 10-to-7 office for cross-border clients. Continuity over a decade requires this.

Foreign subsidiary setup — done in-country, FEMA-compliant in India

We co-ordinate with local incorporation agents (US RA, UK accountant, Dubai PRO) while keeping the FEMA/ODI/RBI side air-tight in India. One single point of contact, two-country compliance.

Black Money Act-aware practice

Schedule FA compliance is a Black Money Act exposure, not just an income tax matter. We disclose foreign assets correctly the first time — penalty under BMA can be ₹10 L per failure regardless of whether tax was due.

A Real Client Situation

Three years of missing transfer pricing. Closed without addition.

Case · Transfer Pricing Cleanup

Dubai-based business owner with Pvt Ltd subsidiary in Ahmedabad — 3 years of TP exposure.

The client's Indian subsidiary provided technical and back-office services to his Dubai parent — but the previous CA had never filed Form 3CEB or maintained transfer pricing documentation. Transfer pricing scrutiny notice arrived for AY 2021-22, with a likely upward adjustment of ₹4.8 Cr based on the AO's preliminary view.

We took over. Reconstructed three years of arm's length pricing using TNMM with comparable Indian companies, prepared the master file, filed Form 3CEB for all three years (with belated filing rationale), and represented before the Transfer Pricing Officer through 4 hearings. Closed all three years without any adjustment. Form 3CEB compliance now ongoing.

~₹47 L tax + penalty saved3 AYs closed cleanOngoing TP retainer
Anonymised. Specific numbers and timelines representative of typical outcomes.
Frequently Asked Questions

NRI questions, answered straight.

I'm an NRI in Dubai. Do I need to file an ITR in India?

Yes, if you have any Indian-source income — rental from Indian property, FD interest, capital gains on Indian shares/mutual funds, or NRO account interest — and the total exceeds the basic exemption limit (₹2.5 L). Even below the limit, filing is recommended if TDS has been deducted and you want a refund. Foreign salary earned in Dubai is not taxable in India for an NRI.

How does the 182-day rule actually work?

Two tests: (1) Stay in India ≥ 182 days in the financial year (April 1 to March 31) — automatically Resident. (2) Stay ≥ 60 days in current FY plus ≥ 365 days cumulatively over the previous 4 FYs — also Resident. There are exceptions for Indian citizens leaving for employment abroad (only test 1 applies, with 182 days). The day-count includes the day of arrival and day of departure.

What is RNOR status and why does it matter?

RNOR — Resident but Not Ordinarily Resident — is a transitional status for returning NRIs. You are Resident under the day-count test but fail one or both "ordinarily resident" tests: resident in 2 of the last 10 FYs, AND ≥ 730 days in India in the last 7 FYs. RNOR status means foreign income is not taxed in India. For most returning NRIs, RNOR applies for the first 2-3 years after return — a window where foreign capital gains, foreign dividends, and ESOP exercise can be planned tax-efficiently.

Which ITR form should I file as an NRI?

NRIs cannot file ITR-1 (Sahaj). Use ITR-2 if your income is from salary, house property, capital gains, or other sources (no business income). Use ITR-3 if you have business or professional income from India. Schedule FA disclosure is mandatory for Residents (not for NRIs in pure NRI status).

I have ESOPs from my US employer. How are they taxed?

Two stages. (1) At exercise: The "spread" — difference between exercise price and FMV of the share — is taxed as salary perquisite in the country of employment (US). If you are RNOR or NRI when you exercise, India does not tax this. If you are ROR, India taxes worldwide salary, with DTAA relief for tax paid in US. (2) At sale: Capital gains on sale of the share. For ROR, gain on the difference between sale price and FMV at exercise is taxed in India. RNOR / NRI: typically not taxed in India unless the broker/account is structured in India.

Can I claim DTAA relief for tax paid abroad?

Yes — if you are Resident in India and have already paid tax on the same income in the foreign country. File Form 67 (online, before ITR filing) declaring the foreign income, foreign tax paid, and DTAA article relied upon. You will need a Tax Residency Certificate (TRC) from the foreign country and (often) Form 10F. The credit is limited to the lower of foreign tax paid or Indian tax on that income.

What is Schedule FA and do I need to fill it?

Schedule FA (Foreign Assets) is a section of ITR for Residents (ROR), declaring all foreign assets held during the previous calendar year. Includes: foreign bank accounts, foreign brokerage accounts, foreign immovable property, foreign trust beneficial ownership, foreign retirement accounts (401(k), IRA, UK pension), and foreign company shares. Mandatory regardless of whether income arose. Non-disclosure attracts penalty under Black Money Act — ₹10 L per failure plus prosecution. NRIs and RNORs are not required to file Schedule FA.

I want to repatriate funds from my NRO account to my US account. What's the process?

NRO repatriation: up to USD 1 million per FY (post-tax balance) is allowed under FEMA. Process: (1) Compute final tax payable on income credited to NRO during the year. (2) Obtain Form 15CB (CA certificate) confirming tax has been paid. (3) File Form 15CA (online by remitter) referencing the 15CB. (4) Submit to your AD bank along with FEMA declaration. We handle the full pack — typically 5-7 working days.

I sold property in India as an NRI. What's the TDS rate?

Buyer must deduct TDS under Section 195 at: 20% (with surcharge and cess) on Long Term Capital Gains, or 30% on Short Term. The TDS is on capital gains, not on sale value — but most buyers (and their CAs) deduct on full sale value to be safe, leaving you to claim a refund. Typical refund time: 12-15 months. Far better solution: apply for a Lower TDS Certificate under Section 197 before sale.

Can I get a Lower TDS certificate (197) before the buyer deducts?

Yes — Section 197 application can be filed before sale, computing actual capital gains and the actual tax liability. The Assessing Officer issues a certificate authorising the buyer to deduct TDS at a lower rate (often 1-3% of sale value instead of 20%+). Time required: 4-6 weeks. Mandatory documentation: sale agreement, prior purchase deed, indexation calculation, capital gains computation, exemption claims (54/54F/54EC if any). This single step saves cash flow and a year of refund wait.

I'm setting up a US LLC for my consulting work. What about FEMA?

Indian residents setting up foreign entities trigger ODI (Overseas Direct Investment) rules under FEMA. Process: (1) Determine the route — automatic or approval-based. (2) Submit Form ODI Part I before remittance through your AD bank. (3) Annual filing of Form ODI Part II / APR (Annual Performance Report). (4) Maintain records of foreign entity financials. Setting up "informally" without FEMA filing creates compounding exposure later. Even a US LLC for consulting work needs ODI compliance if you hold ownership.

I'm returning to India after 8 years. When should I plan my move?

Ideally 6-12 months before return. Decisions to make before crossing back: ESOP exercise timing (large unrealised gains may want to be exercised while still NRI), transfer of foreign brokerage accounts, capital gains on foreign holdings (often best realised in NRI year), bringing back funds (use up the NRO repatriation limit), and structuring the return month to maximise RNOR window. Some of these have hard deadlines tied to your departure date from the foreign country and your day-count in India. We model your specific situation.

What are FEMA penalties for non-disclosure of foreign assets?

FEMA contraventions (e.g., undisclosed ODI, late filings) typically attract compounding fees rather than fixed penalties — calculated as 200% of the contravention amount over the period of default, often negotiable down through compounding application. Separately, undisclosed foreign assets fall under the Black Money Act — penalty of ₹10 L per failure plus 120% of tax on the asset value plus possible prosecution. The two regimes overlap. Both are triggered by the same non-disclosure.

Do you handle FBAR and FATCA filings for US-based clients?

FBAR (FinCEN Form 114) and FATCA (Form 8938) are US filings — we co-ordinate with US-based CPAs we have working relationships with for these. Our practice is the Indian side: ITR, Schedule FA, DTAA relief, tax position documentation that supports the US filings. For US tax returns, retainer is structured between us and our US CPA partner — single point of communication, two countries handled.

Ready to Talk?

Book a free 60-minute residency & cross-border review.

Returning to India? Going abroad? Already abroad and unsure? We will map your residency, your foreign asset position, and the optimal tax path — across both jurisdictions.

Direct (CA Mitul Pujara)
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A-309, Privilon, Iskcon Cross Road, Ahmedabad