NRI taxability rules define India source income, require pre remittance compliance and provide DTAA relief mechanisms.
International tax rules prescribe that NRIs are taxable in India only on income received or deemed to be received in India, determined by deeming provisions (business connection, property, capital gains, salary for services rendered in India, specified dividends, interest, royalty and fees). Special computation rules restrict deductions for investment income and prescribe separate tax treatment for investment income and long term capital gains, while reinvestment relief for foreign exchange assets and transitional benefits on change of residence are available. Compliance requires withholding and prescribed pre remittance certification and filings. DTAA provides exemption or credit relief to avoid double taxation. (AI Summary)