NRI Income Tax & Compliance

A Guide on the Types of TDS (Tax Deducted at Source) in India

By Manish Prajapat |Last Updated: January 9, 2026

A Guide on the Types of TDS (Tax Deducted at Source) in India

Frequently Asked Questions

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

Yes, TDS is mandatory for all NRIs who receive or earn income in India, except for the interest on NRE and FCNR deposits.

The TDS rate on rental income paid to NRIs is 30% as well as applicable surcharge and cess under Section 195. The tenant is responsible for deducting the TDS before making the payment. Unlike resident Indians, who face 5% under Section 194-IB, NRIs face a higher rate with no basic exemption.

NRIs have the option to either lower or avoid excess TDS by obtaining a lower or nil deduction certificate from the Income Tax Department under Section 197. This certificate should be submitted to the tenant or payer to deduct TDS at a reduced rate or not at all, based on the income.

Surcharge is charged on TDS for NRIs based on income slabs. For income exceeding Rs. 50 lakhs, a 10% surcharge is applicable. For Rs. 1 crore or more, the rate is 15%. It will keep increasing further for ultra-high income. This is added with the base TDS and 4% cess

As an NRI, you can claim a TDS refund at the time of filing your ITR (usually using ITR-2), provided that your actual tax liability is lower than the TDS deducted. The refund amount will be processed and credited by the Income Tax Department to the NRI's bank account, which will typically take a few months.

Form 26AS (consolidated tax statement) and Form 16A; both these documents are mandatory to track and verify the TDS deducted and deposited against your PAN card.

Section 194N applies to cash withdrawals exceeding Rs. 1 crore in a fiscal year from bank accounts. It is generally not applicable to NRIs because most of their transactions are done online or through NRE/NRO accounts. However, if an NRI holds a resident account, this section may apply.

Yes, NRIs can claim DTAA benefits to avoid paying tax twice on the same income- once in India and once in their country of residence. They must provide a Tax Residency Certificate (TRC) and Form 10F to claim lower TDS rates or tax credit when filing returns or receiving income.

Yes, NRIs are required to file an income tax return in India if they earn any taxable income from India.

Rental income from property in India.
Capital gains from sales, mutual funds, shares, and other investments.
Interest income from an NRO account.
Total income earned in India exceeds the basic exemption limit.
For claiming TDS refunds.

However, please note that if, as an NRI, you have no indian income and only have foreign income, then filing an ITR in India as an NRI is generally not required; however, it is advisable to do so.

India and Saudi Arabia have signed a Double Taxation Avoidance Agreement (DTAA) to prevent the same income from being taxed twice.

The India and Saudi DTAA

India-Saudi DTAA clearly defines which country in India has the right to tax a specific income.
It also helps you avoid double taxation on income such as salary, business income, interest, and capital gains.
Provides clarity on residential status and the applicable tax treatment for NRIs.
Now that we know Saudi Arabia does not levy any personal tax on salary income, DTAA mainly helps determine an individual's compliance and taxability rather than claim a tax credit.

No, the salary earned in Saudi Arabia is not taxable in India if you qualify as an NRI under the Indian Income tax laws.

The salary you earn in Saudi Arabia may become taxable in India under the following conditions.

You become a resident Indian during the financial year.
The salary is received for services rendered in India.

The tax treatment of bank interest for NRIs is as follows.

NRO account interest: Interest earned on an NRO account is taxable in India.
NRE Account interest: The NRE account interest is fully tax-exempt in India.
FCNR Account interest: It is fully exempt in India.

Yes, a PAN card is mandatory to file an Income Tax return in India, even if you are an NRI living in Saudi Arabia.

You need a PAN Card under the following conditions:

To file ITR online
Claim TDS refunds
To report capital gains or the rental income.
Open and operate NRO/NRE bank accounts.
For making investments and other financial transactions.

Yes, as an NRI living in Saudi Arabia, you can file yur Indian income tax return completely online, without visiting India.

Online filing includes:

You must accurately upload all the documents asked for
Tax calculation and compliance check.
ITR filing on the official portal of the Income Tax.
E-verification using net banking or the Aadhaar (if applicable).
Online refund tracking.

NRI Income Tax & Compliance

A Guide on the Types of TDS (Tax Deducted at Source) in India

By Manish Prajapat |Last Updated: January 9, 2026

Frequently Asked Questions

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

Yes, TDS is mandatory for all NRIs who receive or earn income in India, except for the interest on NRE and FCNR deposits.

Form 26AS (consolidated tax statement) and Form 16A; both these documents are mandatory to track and verify the TDS deducted and deposited against your PAN card.

Yes, NRIs are required to file an income tax return in India if they earn any taxable income from India.

Rental income from property in India.
Capital gains from sales, mutual funds, shares, and other investments.
Interest income from an NRO account.
Total income earned in India exceeds the basic exemption limit.
For claiming TDS refunds.

However, please note that if, as an NRI, you have no indian income and only have foreign income, then filing an ITR in India as an NRI is generally not required; however, it is advisable to do so.

India and Saudi Arabia have signed a Double Taxation Avoidance Agreement (DTAA) to prevent the same income from being taxed twice.

The India and Saudi DTAA

India-Saudi DTAA clearly defines which country in India has the right to tax a specific income.
It also helps you avoid double taxation on income such as salary, business income, interest, and capital gains.
Provides clarity on residential status and the applicable tax treatment for NRIs.
Now that we know Saudi Arabia does not levy any personal tax on salary income, DTAA mainly helps determine an individual's compliance and taxability rather than claim a tax credit.

No, the salary earned in Saudi Arabia is not taxable in India if you qualify as an NRI under the Indian Income tax laws.

The salary you earn in Saudi Arabia may become taxable in India under the following conditions.

You become a resident Indian during the financial year.
The salary is received for services rendered in India.

The tax treatment of bank interest for NRIs is as follows.

NRO account interest: Interest earned on an NRO account is taxable in India.
NRE Account interest: The NRE account interest is fully tax-exempt in India.
FCNR Account interest: It is fully exempt in India.

Yes, a PAN card is mandatory to file an Income Tax return in India, even if you are an NRI living in Saudi Arabia.

You need a PAN Card under the following conditions:

To file ITR online
Claim TDS refunds
To report capital gains or the rental income.
Open and operate NRO/NRE bank accounts.
For making investments and other financial transactions.

Yes, as an NRI living in Saudi Arabia, you can file yur Indian income tax return completely online, without visiting India.

Online filing includes:

You must accurately upload all the documents asked for
Tax calculation and compliance check.
ITR filing on the official portal of the Income Tax.
E-verification using net banking or the Aadhaar (if applicable).
Online refund tracking.

A Guide on the Types of TDS (Tax Deducted at Source) in India

Frequently Asked Questions

Is TDS Mandatory for NRIs?

What is the TDS Rate on Rental Income for NRIs?

Can TDS Be Avoided?

What is the Surcharge on TDS for NRIs?

When Do I Claim a Refund on TDS?

What Documents Help NRIs Track TDS Deductions?

What is Section 194N for NRIs?

Can NRIs benefit from Double Taxation Avoidance Agreements (DTAAs)?

Do I Need to File an Income Tax Return if I Am an NRI?

What Is the Double Tax Treaty Between India and Saudi Arabia?

Is the Salary Earned in Saudi Arabia Taxable in India?

Which Bank Account Interest Is Taxable for NRIs in Saudi Arabia?

Do I Need a PAN Card to File ITR From Saudi Arabia?

Can I File My Indian Tax Return Online From Saudi Arabia?

A Guide on the Types of TDS (Tax Deducted at Source) in India

Frequently Asked Questions

Is TDS Mandatory for NRIs?

What is the TDS Rate on Rental Income for NRIs?

Can TDS Be Avoided?

What is the Surcharge on TDS for NRIs?

When Do I Claim a Refund on TDS?

What Documents Help NRIs Track TDS Deductions?

What is Section 194N for NRIs?

Can NRIs benefit from Double Taxation Avoidance Agreements (DTAAs)?

Do I Need to File an Income Tax Return if I Am an NRI?

What Is the Double Tax Treaty Between India and Saudi Arabia?

Is the Salary Earned in Saudi Arabia Taxable in India?

Which Bank Account Interest Is Taxable for NRIs in Saudi Arabia?

Do I Need a PAN Card to File ITR From Saudi Arabia?

Can I File My Indian Tax Return Online From Saudi Arabia?