Which ITR Form Is Used to Report FPI Income?

FPI income is generally reported in ITR-2 or ITR-3, based on whether the taxpayer has business income. Capital gains and other income from FPI must be reported in the relevant schedules of the ITR.

NRI Income Tax & Compliance

FPIs Taxability in India

By Manish Prajapat |Last Updated: February 16, 2026

Foreign Portfolio Investment has grown as a crucial avenue for international investors looking to capitalize on growth opportunities within India's vibrant financial markets. FPI refers to the investment a foreign investor has made in Indian financial markets.

Regulated by the Securities and Exchange Board of India (SEBI) and governed by key tax laws, FPI allows foreign investors to diversify their portfolios by investing in Indian securities without seeking control over the underlying companies. It's attractive in India due to liberalized regulations and access to one of the world's largest capital markets. In this blog, we will cover everything about FPIs taxability in India, including its definition, investment avenue, tax rules, and FPIs benefits from DTAA.

Manish Prajapat(Tax Expert)

Mr Manish is a financial professional with over 10 years of experience in strategic financial planning, performance analysis, and compliance across different sectors, including Agriculture, Pharma, Manufacturing, & Oil and Gas. Mr Prajapati has a knack for managing financial accounts, driving business growth by optimizing cost efficiency and regulatory compliance. Additionally, he has expertise in developing financial models, preparing detailed cash flow statements, and closing the balance sheets.

Frequently Asked Questions

Yes, if an NRI earns income from Foreign Portfolio Investments (FPI) in India, it is treated as Indian sourced income and needs to be reported in the Indian Income Tax Return. It includes income from capital gains, dividends, or interest.

Yes, NRIs can claim DTAA (Double Taxation Avoidance Agreement) benefit on FPI income when filing their ITR by submitting a valid tax residency certificate (TRC) and Form 10F (if applicable).

FPI in ITR refers to the income earned from Foreign Portfolio Investments in securities like shares, mutual funds, bonds, or debentures, which must be reported while filing the Income Tax Return.

Taxable income from FPI includes capital gains acquired from the sale of securities, dividend income earned from shares or mutual funds, and interest income acquired from debt securities.

Yes, TDS is generally deducted on FPI income at applicable rates. Taxpayers are allowed to claim a refund of excess TDS (if any) by filing their Income Tax Return.

FPIs Taxability in India

Frequently Asked Questions

Do NRIs Need to Report FPI Income in Their Indian ITR?

Can NRIs Claim DTAA Benefit on FPI Income in ITR?

What Does FPI Mean in ITR Filing?

Which Type of Income From FPI Is Taxable?

Is TDS Deducted on FPI Income?

FPIs Taxability in India

Frequently Asked Questions

Do NRIs Need to Report FPI Income in Their Indian ITR?

Can NRIs Claim DTAA Benefit on FPI Income in ITR?

What Does FPI Mean in ITR Filing?

Which Type of Income From FPI Is Taxable?

Is TDS Deducted on FPI Income?