NRI Income Tax & Compliance

Section 9 Of The Income Tax Act

By Varun Gupta |Last Updated: September 26, 2025

Frequently Asked Questions

No matter what your source of income is, we've got you covered. There’s a plan for everybody!

U.S. citizens, resident aliens, and, in some situations, dual-status taxpayers who have paid or accrued foreign income taxes on foreign-sourced income.

If you don't claim the FTC, you may end up paying taxes twice, once in the foreign country and again in the United States.

You can claim the Foreign Tax Credit by filing Form 1116 along with your U.S. tax return (Form 1040). After that, you need to report the foreign income, taxes paid, and attach proof to lower your U.S. tax liability.

No, the foreign tax credit is non-refundable. It only lowers your U.S. tax due. Any unused credit can be carried back 1 year or carried forward up to 10 years.

Form 1116 is required if you paid over $300 ($600 for married filing jointly) in foreign taxes or have multiple sources of foreign income. For smaller amounts, you can claim without using Form 1116.

Section 9 of the Income Tax Act states the circumstances under which income is deemed to arise or accrue in India.

Yes, any amount of money paid to a resident indian by a non-resident is taxable if it exceeds a certain limit.

Divided paid by an Indian company outside India is deemed to arise to accrue in India and will be taxable in shareholder hands.

The Income Tax Act 1961, Section 9 administers the type of income which is deemed to arise or accrue in India.

Yes, Oman is a tax-free country for Indians, as it does not impose any personal taxes or taxes on wages or income earned by NRIs working in Oman. Meaning the salary income earned in Oman is tax-free for individuals.

No, salary earned in Oman is not taxable in India if you qualify as a non-resident Indian under the indian income tax laws, or the salary is earned and received outside India.

For NRIs

Foreign salary means the Oman salary is not taxable in India.
Only income sourced in India, such as rent, NRO interest, capital gains, and so on, is taxable in India.

Yes, India and Oman are bound by the Double Taxation Avoidance Agreement (DTAA). The India-Oman DTAA prevents your income from being double-taxed.

India-Oman DTAA:

Exempt from taxation on the NRI income.
Clarifies the tax rights on salary, capital gains, interest, and business income of the individual.
Supports the position that the salary earned in Oman by an NRI is not taxable in India
The DTAA is still helpful for NRIs with income in India and abroad.

Yes, NRIs in Oman must file their ITR in India if they have any kind of taxable income in India, such as.

Earning rent from a rented property in India.
Capital is from shares, mutual funds, or property.
Interest from NRO bank accounts.
Or any other income received in India.

Yes, Oman is considered a favorable destination for Indian professionals to work or live there.

Yes, and an Indian can own a property in Oman, but with some restrictions.

Foreigners can buy property only in the Integrated Tourism Complexes (ICTs).
Ownership is allowed in specific locations approved by the government.
Owning a property in a foreign country can provide you with residency benefits, subject to the regulations.