In short: NRI DTAA double tax relief allows NRIs working in the Gulf, UK, USA, or Singapore to avoid paying tax twice on the same income. Whether relief applies depends first on your residential status in India under the Income Tax Act, 2025, which came into force on 1 April 2026.
Key points
- The Income Tax Act, 2025 replaced the Income Tax Act, 1961 on 1 April 2026. For income earned up to 31 March 2026, the old Act still applies, and double taxation relief was governed by Sections 90, 90A, and 91 of the 1961 Act. Under the new Act, double taxation relief provisions are covered in Section 159.
- You are treated as an NRI if you spend fewer than 182 days in India in the relevant financial year — or, if you left India for employment abroad, the 182-day rule applies regardless of your prior-year presence.
- As an NRI, only your Indian-sourced income is taxable in India. Foreign income earned and received outside India is not taxed here.
- A special “deemed residency” rule introduced in 2020 targets Indian citizens in zero-tax jurisdictions who earn more than ₹15 lakh from Indian sources and are not liable to pay taxes anywhere else. They are classified as Resident but Not Ordinarily Resident (RNOR), not as full residents — so only their Indian income is taxed in India.
- The Income Tax Act, 2025 leaves residency criteria unchanged. NRIs in zero-tax Gulf countries who meet the ₹15 lakh threshold continue to be classified as RNOR, not as full residents.
- India has signed Double Taxation Avoidance Agreements (DTAAs) with several countries including the UK, USA, and Singapore. These treaties determine which country has the right to tax specific types of income and ensure the same income is not taxed twice.
What law governs NRI taxation in India right now?
India passed the Income Tax Act, 2025 (No. 30 of 2025), which received Presidential assent on 21 August 2025 and came into force on 1 April 2026, replacing the six-decade-old Income Tax Act, 1961.
The new Act is largely a simplification exercise — cleaner language, fewer redundant provisions — but tax rates and regimes remain unchanged. If you are filing for Assessment Year 2026-27 (income earned up to 31 March 2026), you still apply the 1961 Act’s provisions for double taxation relief.
For income earned from 1 April 2026 onwards, Section 159 of the new Act governs double taxation relief. However, because the transition is recent, always verify the applicable section against the primary text of the Act on the India Code portal.
How does India decide whether you are an NRI?
Your residential status is determined year by year, not permanently. Under the Income Tax Act, 2025 (carrying forward the 1961 Act’s approach), you are a Resident of India in a financial year if either of two conditions is met:
| Condition | Days in India (current year) | Days in India (preceding 4 years) |
|---|---|---|
| Condition 1 | 182 days or more | Not relevant |
| Condition 2 | 60 days or more | 365 days or more (in aggregate) |
If you satisfy neither condition, you are a Non-Resident Indian. Critically, if you are an Indian citizen who left India specifically for employment abroad (including crew of an Indian ship), only the 182-day rule applies — Condition 2 does not apply to you.
This distinction matters enormously for NRIs who visit India regularly. If you spend 60 or more days in India in a year while also having spent 365 days over the prior four years, you could inadvertently become a Resident.
What is the deemed residency rule, and does it affect Gulf NRIs?
In 2020, Parliament introduced a “deemed residency” provision aimed at Indian citizens living in zero-tax jurisdictions — chiefly Gulf countries like the UAE, Saudi Arabia, Qatar, and Bahrain, which levy no personal income tax.
Without this rule, an Indian citizen could spend less than 182 days in India, avoid Indian residency, and also pay no tax abroad, effectively escaping all tax on income from Indian sources. The deemed residency provision closes that gap.
If you are an Indian citizen who earns more than ₹15 lakh from Indian sources and is not liable to pay tax in any other country by reason of residence, domicile, or any similar criterion, you are treated as a deemed resident of India.
However — and this is the key protection — deemed residents are classified as RNOR, not as full Residents. As an RNOR, only your Indian-sourced income is taxed in India. Your foreign income (earned and received outside India) remains outside Indian tax.
The Income Tax Act, 2025 confirms that this position is unchanged. Concerns had been raised during the Bill’s drafting that deemed residents might be reclassified as full Residents, which would bring their global income into the Indian tax net. Those concerns have been laid to rest.
How does NRI DTAA double tax relief actually work?
A DTAA is a bilateral treaty between India and another country. Its core purpose is to decide, for each type of income (salary, dividends, interest, capital gains, royalties, and so on), which country gets to tax it — or how the tax burden is shared.
India has DTAAs with many countries including the UK, USA, and Singapore. The Gulf’s major NRI destinations — UAE, Saudi Arabia, Qatar, Bahrain, Oman, and Kuwait — also have agreements with India.
Relief under a DTAA is typically provided in one of two ways. Under the exemption method, income taxed in one country is fully exempt in the other. Under the tax credit method, you pay tax in both countries but receive a credit in your country of residence for the tax already paid in the source country.
To claim DTAA relief in India, you generally need a Tax Residency Certificate (TRC) from the country where you reside, showing that you are treated as a resident there for tax purposes. You also need to furnish other prescribed information. Always check the specific DTAA and the current prescribed forms, as requirements can be updated.
For detailed guidance on claiming cross-border tax relief and understanding how Indian tax law applies to your income abroad, explore the Law for You guides at The Courtroom, which cover related personal finance and taxation topics in plain language.
What about the UK, USA, and Singapore specifically?
India has separate DTAAs with the UK, the USA, and Singapore. Each treaty has its own rules on which types of income are taxable in which country and at what rate. Salary income, for instance, is typically taxed where the work is performed, but there are exceptions for short-term assignments and government employees.
Because each treaty is different and the Income Tax Act, 2025 is still in its early phase of implementation, you should read the specific DTAA text and consult a qualified tax advisor before filing. The treaty text is publicly available and should always be your first reference.
What changed with the Income Tax Act, 2025 for NRIs?
For most NRIs, the practical answer is: very little changed in substance. Residency rules are the same. The deemed residency classification as RNOR is preserved. Tax rates are unchanged.
The main changes are structural. Provisions that were spread across multiple sections of the 1961 Act have been consolidated and simplified in the 2025 Act. Double taxation relief, previously under Sections 90, 90A, and 91 of the 1961 Act, now sits under Section 159 of the new Act for income from 1 April 2026 onwards.
Transitional provisions ensure that proceedings already underway under the 1961 Act are not disrupted by the repeal.
Frequently asked questions
If I live in Dubai and earn only rental income from a property in India, will I be taxed in India?
Yes. As an NRI, your Indian-sourced income — including rental income from property located in India — is taxable in India regardless of where you reside. However, if you qualify as a deemed resident and are classified as RNOR, only your Indian income is taxed here and your Dubai earnings remain outside Indian tax. The India-UAE DTAA may also affect how much tax applies; check the treaty and consult a tax advisor.
Which section of the new Income Tax Act, 2025 covers double taxation relief?
Section 159 of the Income Tax Act, 2025 covers double taxation relief for income earned from 1 April 2026 onwards. For income earned up to 31 March 2026 (Assessment Year 2026-27), you should refer to Sections 90, 90A, and 91 of the Income Tax Act, 1961, as the old Act applies to that income. Always verify the current text on the India Code portal at indiacode.nic.in.
I visited India for 70 days this year. Does that make me a Resident?
It might, depending on how many days you were in India over the preceding four years. If your total presence in India over those four years was 365 days or more, then 60 days or more in the current year makes you a Resident under Condition 2 of the residency test. However, if you left India specifically for employment abroad, only the 182-day rule applies to you, and 70 days would keep you classified as an NRI.
Primary sources
- India Code — Income Tax Act, 2025 and Income Tax Act, 1961 (full text)
- Income Tax Department of India — official portal for residency rules, forms, and DTAA guidance
- Supreme Court of India — judgments on residency and double taxation disputes
Written by Editorial Team, The Courtroom · Last verified 2026-07-14
This article is for general information only and is not legal advice. Laws change; verify against the primary sources cited and consult a qualified advocate for your situation.
