- Overview
- Who Needs to Pay Attention?
- For Resident Indians with Foreign Income or Assets
- For NRIs Filing ITR in India
- DTAA Benefit
- Summary
- Final Thought
As the world shrinks and wallets grow across borders, many Indians now earn or invest abroad. But with global income comes local responsibility – yes, we’re talking taxes. Whether you’re a Resident Indian with a foreign bank account or an NRI
earning rental income from India, read on to avoid nasty surprises.
Who Needs to Pay Attention?
Resident Indians who have:
- Salary from a job abroad
- Foreign bank accounts
- Overseas property or investments (like mutual funds, stocks)
- ESOPs from a foreign employer
- Foreign pension funds (like 401k, IRA)
NRIs who earn income in India:
- Rent from Indian property
- Salary credited in India
- Capital gains from stocks or real estate
For Resident Indians with Foreign Income or Assets
🔍 Taxability:
If you’re classified as a Resident and Ordinarily Resident (ROR) – your entire global income is taxable in India.
What Must Be Disclosed?
- All foreign bank accounts
- Properties held abroad
- Shares, bonds, mutual funds
- ESOPs or RSUs from global employers
- Retirement accounts (like 401k)
Where to Disclose?
In Schedule FA (Foreign Assets) of your ITR.
Beware: Missing even one asset can cost you up to INR 10 lakh per year under the Black Money Act. Don’t skip it!
Which ITR Form? ITR-2 or ITR-3, depending on other income sources
For NRIs Filing ITR in India
You are liable to pay tax in India on:
- Income earned in India (salary, rental, capital gains, etc.)
- Income received or accrued in India
ITR Form to Use:
👉 ITR-2 (for salaried or rental income)
👉 ITR-3 (if you have business/professional income)
DTAA Benefit:
Double taxed? No problem. Claim relief under the Double Taxation Avoidance Agreement (DTAA) – so you don’t pay tax twice.
Smart Filing Tips
- Keep foreign bank statement records.
- Use foreign exchange rates as per SBI TT Buying Rate on the last day of the financial year.
- Always disclose all overseas assets—even if no income is generated.
- File within the due date to avoid scrutiny.
Summary
|
Category |
Taxable in India? |
Form |
Notes |
|
ROR with foreign salary and any other foreign assets |
✅ Yes |
ITR-2 |
Disclose in Schedule FA |
|
NRI with Indian rental income |
✅ Yes |
ITR-2 |
No need to report foreign assets |
|
ROR having business income and holding foreign assets |
✅ Yes |
ITR-2/3 |
Disclose in Schedule FA |
|
ESOPs from foreign company |
✅ Yes |
ITR-2/3 |
Declare under capital gains & Schedule FA |
📌 Final Thought
Global income = Local responsibility.
If your money travels across borders, make sure your ITR does too – correctly and completely. Be honest, be timely, and you’ll sleep peacefully knowing you’re tax-compliant.
