Cross-border tax mistakes share one feature: they are invisible until they are expensive. An NRI's Indian filings look optional until a refund is lost or a property sale is mangled; a returning Indian's foreign accounts look irrelevant until the first resident-year return is filed without disclosing them. This checklist covers both directions of the journey.
For NRIs: every year
- Count your days. Residential status is computed fresh each year from physical presence, with special rules for certain categories, and it determines everything else. Keep the travel record; do not reconstruct it from memory
- File an Indian return if your Indian income (rent, interest, dividends, capital gains) exceeds the basic threshold, or whenever TDS has been deducted beyond your actual liability. Unclaimed refunds are the most common NRI money left on the table
- Use the right bank accounts. The distinction between accounts for foreign earnings and accounts for Indian income is not cosmetic, it affects taxability and repatriation
- Claim treaty relief deliberately: it generally requires a tax residency certificate from your country of residence and proper disclosure in the return, not just an assumption that the treaty applies
- Watch TDS on everything paid to you. Tenants, buyers and banks must deduct at non-resident rates, which are typically higher; plan for the cash-flow and the refund cycle
For NRIs: selling property
- Expect the buyer to deduct TDS on the full sale value, not the gain, usually far more than the real tax
- Apply for a lower-deduction certificate from the department before the sale; it aligns the deduction with the actual liability and is the single highest-value piece of paper in an NRI property transaction
- Reconstruct the cost history early (purchase documents, improvement bills, inheritance records) because the gains computation depends on it
- Plan repatriation of proceeds in advance; it has its own documentation requirements and limits
Planning the return to India
- Understand RNOR (Resident but Not Ordinarily Resident) the transitional status most returning Indians qualify for, during which most foreign income stays outside Indian tax. It lasts a limited number of years determined by your history, and it is the window in which to reorganise foreign assets
- Sequence the move with the status rules in mind: the financial year in which you return, and your day-count in it, decide when residence begins, sometimes shifting a move by weeks changes the first taxable year
- Decide what to do with foreign pensions, retirement accounts and investment portfolios while still in the RNOR window, with advice on both countries' rules
- Convert bank accounts to the appropriate resident categories once status changes; the old classifications stop being legitimate
After becoming resident
- Disclose foreign assets and incomes in the Indian return from the first year ordinary residence begins, the foreign asset schedule is not optional, and the penalties under the black money law for silence are severe even where little tax is due
- Reconcile information flows: India receives financial account data from most countries automatically, so the return must match what the department already knows
- Revisit estate and succession arrangements, wills, nominations and joint holdings made as an NRI may no longer fit
The single principle
In cross-border tax, sequence beats cleverness. Status first, then transactions, then filings, each step documented at the time. Almost every expensive NRI tax problem we have unwound began with steps taken in the wrong order.