Library / Income-tax Act, 2025: The Professional's Master Guide

55. Case Study 8: Non-Resident Individual

Facts. Sonia, an NRI in Canada, has in Tax Year 2026-27: sale of a Pune flat for Rs. 1.5 crore (LTCG Rs. 80 lakh, lower deduction certificate obtained, TDS Rs. 11,44,000); NRO FD interest Rs. 2,00,000 (TDS at 31.2% = Rs. 62,400); rent from another flat Rs. 3,60,000 (TDS by tenant at 31.2% = Rs. 1,12,320). She is in the new regime.

House property: 3,60,000 less 30%	2,52,000
Other sources: NRO interest	2,00,000
Normal income	4,52,000
Tax on normal income (5% of 52,000; no section 156 rebate for non-residents)	2,600
LTCG Rs. 80,00,000 at 12.5% (no basic exemption adjustment for non-residents)	10,00,000
Surcharge 10% (total income Rs. 84.52 lakh)	1,00,260
Cess 4%	44,114
Total tax	11,46,974
Less: TDS (11,44,000 + 62,400 + 1,12,320)	(13,18,720)
Refund due	1,71,746

Points. The refund arises because the tenant and bank deducted at 30% while her actual rate on that income is much lower. For future years, she can claim the India-Canada treaty rate on interest (generally 15%) by giving her TRC and Form 41 to the bank, and apply for a lower deduction certificate for rent. She files ITR-2, reports the Indian bank accounts, and claims the refund.