The India-UK treaty allocates taxing rights by residence and income category; it is not a blanket exemption. Review permanent home, centre of vital interests and the other tie-breaker factors where both countries treat you as resident. Keep residence evidence and tax records, and assess relief for each income stream separately.
Last reviewed: · Reviewed by Regi Tom Antony, FCA
Article 4: permanent home, centre of vital interests, habitual abode, nationality. Most returning Indians pass to India once family, home and economic ties shift. Connect the Section 6 residence tests, Indian return filing, Schedule FA for ROR, and return-planning decisions before applying a treaty claim.
Employment (Art. 16), business profits (Art. 7), dividends (Art. 11), interest (Art. 12), pensions (Art. 19/20), other income (Art. 23). Each has its own withholding and credit logic.
The treaty only resolves residency once both countries treat you as resident under their own law — typically in the year you move, when the UK statutory residence test and India's Section 6 can both catch you. The tie-breaker first asks where you have a permanent home available. If you have homes in both, it looks at your centre of vital interests: family, economic ties, where your spouse and children live. Habitual abode and nationality come next only if those are inconclusive. Keep evidence — the end of a UK tenancy, the sale or letting of your UK home, school admissions in India.
Salary is taxable where the work is physically done, so days worked in India after you move are taxable in India even if a UK employer pays you. Dividends and interest can be taxed in both countries, with the source country's rate limited by the treaty and credit given by the country of residence. Private pensions for past employment are generally taxable only in the country of residence, while government service pensions are normally taxed by the paying government. Capital gains are left largely to each country's domestic law, which is why foreign tax credit, not exemption, does most of the work on UK shares and property.
When you are resident in India with UK-taxed income, India gives credit for the UK tax, up to the Indian tax on the same income. Claim it by filing Form 67 with your Indian return, supported by evidence of UK tax such as your self-assessment calculation, P60 or dividend statements. Because the UK year ends on 5 April and India's on 31 March, apportion UK tax to the Indian year on a consistent basis and keep the working.
While you are UK resident, Indian rent, NRO interest and Indian capital gains are reportable in the UK; India taxes them first as the source country and the UK gives credit. To get treaty-limited withholding in India on interest or dividends, give the payer an HMRC certificate of residence and Form 10F.
Step-by-step ITR filing: forms, residential status, Schedule FA and refunds.
Slabs, capital-gains rates and the TDS that applies to NRI income.
How treaty credit and Form 67 stop the same income being taxed twice.
Our NRI taxation service: filing, notices and treaty claims.
A 15-minute NRI Tax Discovery Call to scope your situation and the right next step.
This guide is general information published by RTA & Associates. It is not tax, legal, financial or investment advice, and it does not create a client relationship. It does not take account of your personal circumstances, and you should not act or refrain from acting on the basis of anything here.
Cross-border outcomes turn on the specific facts — your day-counts, the timing of your move, the wrappers you hold and the treaty position between the two countries. A small change in any of those can change the answer completely.
References to the law, rules or practice of countries other than India are included for general orientation only. They are not advice on the law of that country, and they should be confirmed with a qualified adviser in that jurisdiction before you act.
Tax law, exchange-control rules and treaty positions change, and they change often. This page reflects our understanding as at the date shown above. We do not undertake to update it.
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