NRI Tax Guide 2026
Everything Indian Americans need to know about taxes in both countries
Key Deadlines
| Deadline | What | Where |
|---|---|---|
| April 15, 2026 | US Tax Return (Form 1040) + FBAR | IRS / FinCEN |
| June 15, 2026 | Extended deadline for US citizens abroad | IRS |
| July 31, 2026 | India ITR filing (no audit) | Income Tax Dept |
| October 15, 2026 | US extension deadline | IRS |
Residential Status — The 182-Day Rule
Your tax obligations in India depend on your residential status. You are a Non-Resident Indian (NRI) if you spent fewer than 182 days in India during the financial year (April 1 – March 31), OR fewer than 60 days in the current year AND fewer than 365 days in the preceding 4 years.
As an NRI, you're only taxed in India on: Income earned or received in India (salary for work done in India, rental income, capital gains on Indian assets, interest on NRO accounts). NRE account interest is fully exempt.
India Tax Slabs for NRIs (FY 2025-26)
| Income (₹) | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
New tax regime (default from FY 2023-24). At today's rate: ₹15,00,000 = ~$16,186
DTAA — Avoid Double Taxation
The Double Taxation Avoidance Agreement between the US and India ensures you don't pay tax twice on the same income. Key provisions:
Dividends: Taxed in the country of residence. India withholds 20% TDS, which you claim as a Foreign Tax Credit on your US return (Form 1116).
Capital Gains: Short-term gains on Indian stocks taxed at 15% in India. Long-term gains above ₹1.25 lakh taxed at 12.5%. Claim credit in the US.
Rental Income: Taxed in India at slab rates with 30% TDS. Claim Foreign Tax Credit in US. Keep Form 15CA/15CB for repatriation.
NRE vs NRO Accounts
| Feature | NRE Account | NRO Account |
|---|---|---|
| Purpose | Foreign earnings | Indian income |
| Currency | Deposits in forex, held in INR | INR only |
| Interest Tax (India) | Tax-free | Taxed at slab rate |
| Repatriation | Fully repatriable | $1M/year (with CA cert) |
| Best For | Savings, remittances | Rent, pension, dividends |
FBAR & FATCA — US Reporting Requirements
FBAR (FinCEN Form 114): Required if your foreign financial accounts exceed $10,000 in aggregate at any time during the year. This includes NRE/NRO bank accounts, PPF, mutual funds, and demat accounts in India. Due April 15 (auto-extended to October 15).
FATCA (Form 8938): Required if foreign assets exceed $50,000 on December 31 or $75,000 at any time (single filers). Higher thresholds for married filing jointly. Attach to your 1040.
Penalties: FBAR: up to $10,000 per account per year for non-willful violations. FATCA: $10,000 penalty + potential criminal charges for willful failure.
Sources: IRS.gov, India Income Tax Dept, RBI
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