New vs. Old Tax Regime: Which One Should NRIs Choose?
Confused Between India’s Tax Regimes? Here's What NRIs Should Know
As an NRI, figuring out your India tax obligations is tricky enough — and the choice between the Old and New Tax Regimes only adds to the confusion.
With the Indian government encouraging a shift to the New Regime through lower slab rates, many NRIs are asking: “Should I switch, or stick with what I know?”
Here’s a breakdown to help you make the most tax-efficient decision.
What’s the Difference Between Old and New Tax Regime?
The Old Tax Regime allows for a wide range of deductions and exemptions - such as:
Section 80C (₹1.5L on investments like ELSS, PPF, LIC)
Section 80D (Health insurance premiums)
HRA, LTA, and interest on home loans
NPS contributions and more
The New Tax Regime lowers the tax rates but removes nearly all exemptions and deductions. It's a simpler system - but simplicity comes at the cost of tax-saving flexibility.
What Should NRIs Consider Before Choosing?
1. Do You Have Eligible Deductions?
If you invest in ELSS, pay life/health insurance premiums, or have home loan interest deductions - the Old Regime may be more beneficial.
2. Is Your Income Primarily Passive?
If your India income is mostly interest, rent, or capital gains with minimal deductions - the New Regime may offer lower taxes.
3. Do You Want Simplicity?
The New Regime is easier to file (especially if you’re doing it yourself), but may result in a higher liability if you skip available exemptions.
What’s Our Advice?
There’s no one-size-fits-all answer. Here’s what we recommend:
Use the Old Regime if you have significant deductions or housing loan interest in India.
Consider the New Regime if your income is simple, deduction-free, or if you want a hassle-free filing process.
Still confused? Our NRI tax advisors can run both calculations and guide you on the best choice.
Get Started Here - https://app.goinri.com/india-tax-filing