The Income-tax Act 2025 and What It Actually Changes for NRIs: New Section Numbers, Renamed Forms, the Tax Year, and the Few Things That Are Genuinely New

If you opened the Income-tax Act 2025 looking for the line that raises your tax, you will not find it. The headline numbers an NRI cares about, 12.5% long-term on listed equity, 20% short-term, the 182-day residency test, the treaty route to a lower rate, all survived the rewrite that took effect on 1 April 2026. What did not survive is almost every section number, every form name, and the two-part previous-year and assessment-year vocabulary that India had used since 1961. So the Act is less a tax change than a relabelling exercise, with a small number of real changes buried inside it that genuinely affect how an NRI files, claims treaty relief, and sells property.

The 30-second answer: The Income-tax Act 2025 took effect on 1 April 2026 for Tax Year 2026-27 and repealed the 1961 Act, but for NRIs it is mostly cosmetic. Rates, residency tests, and treaty logic carry over. The real shifts: the previous year plus assessment year split collapses into one tax year; DTAA relief moves from Sections 90/90A to Section 159, with Section 159(8) now requiring a TRC plus the new Form 41 (replacing Form 10F); foreign tax credit Form 67 becomes Form 44; remittance forms 15CA and 15CB become 145 and 146; and from 1 October 2026 a resident buying property from an NRI no longer needs a TAN and can deduct TDS on PAN alone. Section numbers changed everywhere, so update your templates.

This guide assumes you already know your residency status and how your Indian gains are taxed; if not, start with the residency and RNOR guide and the capital gains guide. What follows is the news-analysis cut: what an NRI must actually re-learn, what is pure renumbering you can ignore once your paperwork is updated, and the handful of changes that move money or change a deadline. I will be blunt about which is which, because most of the coverage has blurred a vocabulary change into a panic about new taxes, and the two are not the same thing.

Why a brand-new Act that barely changes your tax still matters

The 1961 Act had been amended so many times over six decades that it had grown to thousands of provisos, explanations, and sub-clauses bolted onto sections that no longer read in sequence. The 2025 Act is the consolidation: it rewrites the same law in plainer drafting, removes dead wood, and renumbers everything into a cleaner sequence. The government has been clear that the intent was simplification, not a rate overhaul, and on the numbers that is true.

For an NRI the practical consequence is narrow but real. Every document you rely on that cites a section, your TDS deduction memo, your chartered accountant's treaty opinion, the certificate your broker issues, the boilerplate in a property sale deed, refers to a section number that no longer exists in the live Act. The tax position is the same; the citation is wrong. That sounds trivial until a payer's compliance team refuses a treaty rate because the supporting note quotes "Section 90" instead of "Section 159", or a buyer's lawyer cannot find the TDS provision the old draft deed names. The cost of the new Act is not a higher bill. It is a season of updating references and re-issuing declarations, and the people who get caught out are the ones who assumed nothing changed because the rate did not.

There is also a transition rule worth holding onto. The repeal of the 1961 Act does not reach backwards. Anything relating to a year before 1 April 2026 stays governed by the old Act: an assessment for AY 2023-24, a pending appeal, a refund for FY 2024-25, all continue under the 1961 provisions and the old form numbers. The new Act and the new forms apply to Tax Year 2026-27 and onwards. So you will live in both worlds for a while, filing this year's return under the new numbering while your older matters still carry the old.

The tax year quietly fixes the most confusing thing about Indian tax

The single change that NRIs will feel most often is also the least dramatic. The 1961 Act ran on two clocks. The previous year was the year you earned the income, ending 31 March. The assessment year was the following year, when that income was assessed and the return filed. Income earned in the year to 31 March 2026 belonged to previous year 2025-26 but was filed and assessed in assessment year 2026-27. Every first-time NRI filer I have ever helped has, at some point, entered the wrong year on the portal because of exactly this mismatch.

The 2025 Act deletes both terms and uses one: the tax year. Income earned in the year ending 31 March 2027 is simply Tax Year 2026-27, assessed after the year closes, with the return due on the same calendar as before. The tax year corresponds exactly to the old previous year, which is the financial year, so nothing about timing or deadlines moves. What disappears is the second, offset label. When you file your Indian return next year, you will select Tax Year 2026-27 rather than wrestling with whether you want FY 2026-27 or AY 2027-28.

There is one edge that NRIs setting up an Indian business or a new source of income should know. A newly established business or a new source of income gets a short first tax year that runs from the date it begins to the following 31 March, rather than a full twelve months. If you start an Indian consultancy or let out a newly bought flat from 1 June 2026, that first tax year is 1 June 2026 to 31 March 2027. This mirrors the old previous-year rule for new sources, so again it is continuity dressed in new language, but it is the kind of detail a sloppy filing gets wrong.

The honest way to think about it: the tax year is a usability upgrade, not a tax change. It removes a genuine source of error without touching a single rupee of liability.

Residency: same tests, new section, and the RNOR question

NRIs braced for the residency rules to tighten, because residency is where the 2025 Act could have done real damage. It did not. Section 6 of the 2025 Act carries the same tests across almost word for word. You are a resident if you are in India for 182 days or more in the tax year, or for 60 days or more in the year combined with 365 days or more across the preceding four years. The relaxations NRIs rely on, the extended 182-day threshold for an Indian citizen leaving for employment abroad and for a visiting NRI in certain income bands, carry over, as does the deemed-resident provision for high-income Indian citizens who are not taxed anywhere else.

The Resident but Not Ordinarily Resident category survives too, with the same logic: even if you trip into resident status, you can still be RNOR if you were a non-resident in the requisite number of prior years or your India stay over the look-back period stayed under the limits. For a returning NRI, RNOR remains the buffer that keeps your foreign income out of the Indian net for a couple of years after you move back. The 2025 Act did not erode it.

What changed is purely the address. The residency provisions sit at a new section number in the renumbered Act, and the determination applies only for tax years beginning on or after 1 April 2026. For tax years up to 2025-26 your residency was decided under the 1961 Section 6 and stays decided there. So if you are reading an old note that says "Section 6(1)(c)" and you are working out your status for Tax Year 2026-27, the test is identical but the citation needs updating. This is the pattern across the whole Act: re-verify the section number, do not re-learn the rule. Our residency and RNOR guide walks the day-counting in detail, and the substance there is unchanged by the new Act.

DTAA relief moves to Section 159, and Section 159(8) is the part that bites

Here is where renumbering stops being cosmetic. Treaty relief under the 1961 Act lived in Sections 90 and 90A: Section 90 for treaties with foreign countries, 90A for specified associations, with the rule that you take the treaty or domestic law, whichever is more beneficial, and the requirement to hold a tax residency certificate. Under the 2025 Act the entire treaty framework consolidates into Section 159, and the empowering clause for the government to sign agreements, grant relief, exchange information, and recover taxes all sits there now.

The clause to memorise is Section 159(8). It writes the documentation condition for treaty relief directly into the statute: a non-resident can claim a treaty benefit only if they furnish a tax residency certificate from their home country's tax authority and the prescribed information and documents. Both, simultaneously. A TRC on its own is no longer enough on the face of the section. Under the 1961 Act the TRC requirement and the Form 10F declaration lived partly in the section and partly in the rules; the 2025 Act elevates the combination into the charging framework itself.

The practical effect for an NRI claiming, say, the India-UAE treaty rate of zero on listed-share gains, or a reduced withholding on Indian interest or royalties, is that the paperwork is now load-bearing in a way it was not always treated as before. Miss the declaration and a cautious payer is on firm ground withholding at the full domestic rate, leaving you to claim a refund by filing a return months later. The mechanics, the TRC, the declaration, and how the more-beneficial test works, are in our DTAA mechanics guide; the rates and section have moved, but the strategy has not.

Form 10F is now Form 41, and the rename is the easy part

The declaration that supports a treaty claim, old Form 10F, becomes Form 41 under Rule 75 of the Income-tax Rules 2026, tied to Section 159(8). It captures the same fields: your tax identification number in your country of residence, your country of residence, your address, and the prescribed particulars that let a payer or the department validate that you actually qualify for the treaty. There is no substantive change in what it asks. It is a renumbered, digitised successor.

What matters is the discipline around it. Form 41 is filed online through the e-filing portal, with no paper route, and non-residents without a PAN can register and verify through an OTP-based flow, so the old problem of needing a PAN just to file Form 10F is handled. There is no statutory hard deadline, but the timing logic is unforgiving in practice: the form should be in place at the time you claim the benefit and, ideally, before or at the moment TDS is deducted, typically once a financial year per income stream. File it after the deduction and you have not saved tax at source; you have created a refund claim.

Put a number on what that means. Take Anjali, a UAE tax resident, who sells Rs 50,00,000 of listed Indian shares she has held long term, with a gain of Rs 20,00,000. Under the India-UAE treaty, gains on shares (other than property-heavy companies) are taxable only in her country of residence, and the UAE levies no personal capital gains tax, so her correct Indian liability on this gain is zero, provided her TRC and Form 41 are in order before the broker or registrar deducts. With the documentation in place, she pays nothing in India.

Now the counterfactual that shows why the form is not optional. If Anjali sells before filing Form 41 and without a valid TRC on record, the deductor cannot apply the treaty and withholds at the domestic 115AD rate. On a Rs 20,00,000 long-term gain, after the Rs 1.25 lakh exemption, tax at 12.5% on Rs 18,75,000 is about Rs 2,34,375 plus cess, roughly Rs 2,43,750 deducted at source. She will get it back, but only by filing an Indian return and waiting out the refund cycle, which is several months of her money sitting with the government. The treaty did not change between the two scenarios. The paperwork did. Under Section 159(8) that paperwork is now the statutory gate, so the lesson the new Act sharpens is one NRIs already half-knew: the TRC and the declaration are not afterthoughts.

Foreign tax credit: Form 67 becomes Form 44

For the NRI who is also taxed at home, the US, UK, and Canada all tax their residents on worldwide income, so the relief flows the other way: you pay Indian tax on Indian income and claim a foreign tax credit in your country of residence, and where India taxes income you have also paid tax on abroad, you claim credit in India. The statement that supports the Indian-side foreign tax credit, old Form 67, becomes Form 44 under the 2025 rules.

The function is unchanged. It is the statement of income from outside India and the foreign tax credit claimed against it, filed to avoid being taxed twice on the same income. If you are an Indian resident or RNOR with foreign income on which you paid tax abroad, this is the form that prevents double taxation on the Indian return. The discipline around it survives too: file it in time and keep the foreign tax payment evidence, because a credit claimed without the supporting statement is a credit easily disallowed. Our foreign tax credit guide covers the ordering and the common mistakes; the form number has moved to 44, the method has not.

The renames worth memorising sit in one place, because these are the four NRIs touch most: Form 10F is now Form 41, Form 67 is now Form 44, and the remittance pair Form 15CA and Form 15CB become Form 145 and Form 146.

Old form (1961 Act)	New form (2025 Act)	What it does for an NRI
Form 10F	Form 41	Treaty self-declaration, filed with TRC to claim DTAA relief
Form 67	Form 44	Statement of foreign income and foreign tax credit claim
Form 15CA	Form 145	Remitter's declaration before a foreign remittance
Form 15CB	Form 146	Accountant's certificate for taxable remittances above Rs 5 lakh

Remittances: 15CA and 15CB become 145 and 146

Every NRI who has moved money out of an NRO account knows the 15CA and 15CB pair. Form 15CA is the remitter's declaration filed before a foreign remittance; Form 15CB is the chartered accountant's certificate confirming the tax position on a taxable remittance. Under the 2025 rules these become Form 145 and Form 146 respectively, for remittances made on or after 1 April 2026.

The structure is the same. Form 146, like the old 15CB, is the accountant's certificate required where the remittance is taxable and crosses the threshold, broadly the same above-Rs-5-lakh trigger that applied under the old rules, while small or specified exempt remittances continue to need only the lighter declaration or nothing at all. If you are repatriating from your NRO account, the workflow your bank and CA run is unchanged in substance: certify the tax has been handled, declare the remittance, then remit. What changes is the form your CA fills and the number your bank's remittance desk asks for. Expect a transition period where some bank templates still reference 15CA and 15CB; the underlying obligation is identical, so do not let an outdated form name stall a remittance.

This matters because remittance is the one compliance step almost every NRI hits at least once a year, and it is the step where a mismatch between the bank's paperwork and the current rules causes the most friction. The fix is simply to confirm your CA is issuing the 2026 forms and your bank accepts them. The repatriation limits, the USD 1 million route, and the documentation behind them are unchanged; see the NRE, NRO, and FCNR accounts guide for those, which the new Act does not touch.

The property-sale change that is genuinely good news

Buried in the compliance restructuring is a change that helps NRIs selling Indian property, and it is one of the few in the Act that is unambiguously new rather than renumbered. When a resident buys property from an NRI, the buyer must deduct TDS under the non-resident provisions, because the sale proceeds are taxable in the seller's hands. Under the 1961 Act, deducting that TDS meant the buyer had to obtain a TAN, a tax deduction account number, a registration step distinct from a PAN that an ordinary individual buyer would never otherwise need. It was a recurring deal-stopper: the buyer's side often did not realise a TAN was required, scrambled for it late, and the closing slipped.

From 1 October 2026, a resident individual or HUF buying property from an NRI seller no longer needs a TAN and can deduct and deposit the TDS using their PAN alone. That removes a real piece of friction from the single largest transaction many NRIs ever do in India. It does not change how much TDS is due or how it is computed, the over-withholding problem on property remains, and the section that governs non-resident TDS is renumbered like everything else, but it makes the buyer's side meaningfully simpler, which matters because a buyer spooked by compliance is a buyer who walks.

It does not, however, fix the bigger NRI property problem. The buyer is still required to deduct on the correct base, and many still over-deduct on the full sale value rather than the gain, freezing lakhs until you file to claim it back. The lever for that is still a lower-deduction certificate applied for before the sale. Put it in numbers: on a Rs 1,50,00,000 flat where your true long-term gain and liability might be around Rs 6,00,000, a cautious buyer deducting 12.5% on the entire sale value withholds roughly Rs 18,75,000, locking up about Rs 12,75,000 of your money for the better part of a year until the refund lands. A lower-deduction certificate obtained before closing tells the buyer to deduct the right amount instead. The new Act eases the TAN step; it does not remove the case for that certificate. The full mechanics are in TDS for NRIs and how to claim refunds.

The TDS section numbers all moved, which matters more than it sounds

One renumbering deserves a flag because it touches almost every NRI transaction. Under the 1961 Act, the TDS provisions were scattered across dozens of separate sections, 195 for non-resident payments, 194-series for various resident payments, each with its own number that practitioners had memorised. The 2025 Act consolidates the TDS and TCS framework into a much smaller cluster of sections, broadly 392, 393, and 394, with the detail organised underneath rather than spread across the old numbered sprawl.

For an NRI the consequence is again citational rather than substantive. The famous "Section 195", the provision under which a buyer deducts TDS on a payment to a non-resident, no longer exists by that number. The obligation is the same, the rate logic is the same, but the section your sale deed, your TDS memo, and your CA's working paper should now cite is the new consolidated number. This is precisely the kind of thing that causes a deal-side compliance team to balk at a document that still reads "195". Re-paper the references and the substance is untouched.

Edge cases worth knowing before you assume nothing changed

Your old returns and pending matters stay on the old Act. If you have an open assessment, an appeal, or a refund from a year before Tax Year 2026-27, it continues under the 1961 Act and the old form numbers. Do not "update" a historic filing to new section numbers; the transition rules keep the old numbering valid for old years. You will genuinely operate in both regimes for a couple of cycles.

A renumbered section is not a re-litigated one. Settled positions under the old sections, the surcharge cap on capital gains, the no-indexation rule on property for NRIs, the basic-exemption set-off denial, carry into the 2025 Act in substance. Do not assume a favourable old position is gone just because its section number changed, and equally do not assume an unfavourable one was quietly fixed. The drafting changed; the policy mostly did not. Where a genuine substantive change exists, it tends to be in the compliance machinery, Section 159(8), the TAN relief, the remittance forms, rather than in the charging rates.

Section 159(8) tightens the treaty claim more than the rename suggests. The most-watched genuinely new element for NRIs is that the TRC-plus-Form-41 requirement is now written into the section that grants the relief. In practice, treat the documentation as a precondition for the rate at source, not as something you can backfill at return time. The treaty rate is the same; the gate in front of it is now statutory.

Watch for transition mismatches in the wild. For several months into 2026-27, banks, brokers, registrars, and even some advisers will have stale templates citing 15CA, 15CB, 10F, 67, and Section 90. The obligation behind each is unchanged, so the safe move is to confirm the current form number with your CA and not let an outdated label, on either side, become an excuse to withhold at the wrong rate or stall a remittance.

The honest read

The honest read is that the Income-tax Act 2025 is, for the overwhelming majority of NRIs, a renumbering and a rename, not a tax change. If you do nothing but update the section and form references in your paperwork, you will pay the same tax in Tax Year 2026-27 that you would have paid under the 1961 Act. The fear-driven coverage that treats a new Act as a new tax burden has it wrong: the rates, the residency tests, the surcharge cap, the property and equity treatment all carried over.

So here is the committed recommendation for the common case. Spend one focused afternoon, ideally with your CA, doing three things. First, replace Form 10F with Form 41 and Form 67 with Form 44 in your filing routine, and make sure your treaty declaration and TRC are filed before your next deduction event, because Section 159(8) now makes that documentation the statutory gate to the treaty rate. Second, tell whoever handles your NRO remittances that 15CA and 15CB are now 145 and 146, so a stale template does not stall a transfer. Third, if you are selling Indian property, take the win that from 1 October 2026 your resident buyer no longer needs a TAN, but still get a lower-deduction certificate before closing, because the new Act eased the TAN step without fixing the over-withholding that traps your money.

The exception who should do more than re-paper is the NRI with a live, high-value treaty position or an open dispute. If you are claiming zero Indian tax on a large share sale under a Gulf treaty, or you have an assessment or appeal straddling the old and new Acts, the renumbering and the elevated Section 159(8) documentation standard are worth a proper professional review, not a blog read, this one included. For everyone else, update the references, keep the documents tight, and stop worrying about a tax rise that the Act did not contain.

Related guides

• Budget 2026: what changed for NRIs
• The July 2024 capital gains overhaul, a recap
• ITR filing for NRIs: AY 2026-27 master guide
• NRI residency and RNOR rules
• DTAA mechanics: TRC, Form 10F and Section 90
• TDS for NRIs and how to claim refunds
• Foreign tax credit and Form 67
• NRE, NRO and FCNR accounts explained
• All News and analysis
• All Taxation guides
• All Banking guides

This guide is educational and general in nature, not individual tax advice. The Income-tax Act 2025 took effect on 1 April 2026 and the rules, forms, and section numbers were still settling into practice as this was written, so confirm the current section and form references and your specific treaty position with a qualified chartered accountant before you file, remit, or sell.