- NRI slabs 2026-27 (new regime): nil to ₹4 lakh, then 5% to 30% in ₹4 lakh steps above.
- No ₹12 lakh rebate for NRIs; old-regime exemption is ₹2.5 lakh at any age.
- Bank TDS on NRO interest is 31.2%; most NRIs get a refund by filing a return.
New regime slabs for NRIs (2026-27)
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Plus 4% health and education cess, and surcharge on high incomes (10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore under the new regime). The ₹75,000 standard deduction applies if you have Indian salary or pension.
No ₹12 lakh rebate for NRIs
Residents with income up to ₹12 lakh pay no tax because of the rebate (section 156 of the Income-tax Act, 2025, formerly section 87A). That rebate is only for residents. An NRI with ₹10 lakh of Indian income pays tax from the first rupee above ₹4 lakh.
Old regime for NRIs
NRIs can still choose the old regime, with its deductions. The basic exemption is ₹2.5 lakh at any age: the higher limits for senior citizens apply only to residents.
Special rates that apply regardless of slab
| Income | Tax for NRIs |
|---|---|
| Listed shares and equity funds, held up to 12 months | 20% |
| Listed shares and equity funds, held over 12 months | 12.5% above ₹1.25 lakh a year |
| Property held over 24 months | 12.5% without indexation (the indexation option for property bought before 23 July 2024 is for residents only) |
| Interest on NRE deposits | Exempt |
Example: why most NRIs are owed a refund
| NRI with ₹10 lakh interest on an NRO fixed deposit | Amount |
|---|---|
| TDS deducted by the bank (30% plus 4% cess) | ₹3,12,000 |
| Actual tax under the new regime: 5% on ₹4 to ₹8 lakh, 10% on ₹8 to ₹10 lakh, plus cess | ₹41,600 |
| Refund if you file an Indian return | ₹2,70,400 |
A treaty rate can cut the TDS itself: for example, India’s treaties with the UAE, UK and US cap tax on interest, if you give the bank a tax residency certificate and Form 41. Either way, filing the return is how you get the excess back. See filing an ITR as an NRI.
Who counts as an NRI?
Broadly, you are a non-resident for a year if you are in India for less than 182 days (with extra tests for some visitors and high earners). Check with the residential status calculator. Moved recently? See the NRI checklist for the UAE and the full NRI taxation guide.
Sources
- Income-tax e-filing portal
- Income Tax Department: Form 41 FAQs (treaty rates for non-residents)
- Consulate General of India, Dubai: CBDT clarification on tax residency of NRIs
Frequently asked questions
What is the income tax slab for NRIs in 2026-27?
Do NRIs get the ₹12 lakh tax rebate?
What is the basic exemption limit for NRIs?
Can an NRI get a refund of TDS on NRO interest?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.