Australia Tax Filing Basics for NRIs
This page is an orientation, not a substitute for the detailed guides on DTAA, foreign asset questions, or property sales. It's here to connect the dots: what an Australian tax resident with India-source income actually has sitting on their plate each filing season, and which of the other guides in this section covers each piece in depth.
This guide explains how the rules generally work and is not tax, legal, or investment advice. Rates, thresholds, and form numbers change with each Union Budget and Finance Act, and your own situation (which country you live in, your visa or citizenship status, how the asset was funded) can change the answer. Confirm your specific case with a chartered accountant or tax advisor before you file anything or move money. A 2023 Treasury proposal to replace Australia's residency tests with a simpler day-count rule has not been enacted as of when this page was checked. The tests described below are the current law; don't rely on other guides that assume the proposal already took effect.
The starting principle: worldwide income, once you're an Australian tax resident
If you're an Australian resident for tax purposes, you must declare all income you've earned in Australia and overseas, not just Australian-source income. That means NRO interest, dividends from Indian investments, rental income from Indian property, and capital gains from selling Indian assets all generally belong on your Australian return, in addition to whatever India requires. NRE interest belongs there too, even though it's exempt from Indian tax, since that exemption has no bearing on Australian taxability. Whether all of this applies to you at all comes down to the resides test and its three backup tests, checked in that order.
The pieces, and where each is covered
- Avoiding double taxation on India-source income: get a Certificate of Residency from the ATO plus India's Form 41 self-declaration, then claim the Foreign Income Tax Offset for Indian tax actually paid. Covered in the Australia-India DTAA guide.
- The foreign-assets question on your return: a single yes-or-no question about holding AUD 50,000 or more in foreign assets, distinct from the requirement to declare the underlying foreign income itself. Also covered in the DTAA guide.
- Selling property in India: India withholds tax at the sale (TDS), and you'd generally claim the Foreign Income Tax Offset for that against any Australian tax on the same gain, remembering that the treaty doesn't cap the capital-gains rate the way it caps dividends and interest. See Selling Property in India as an NRI for the India side of this.
- Withdrawing EPF or EPS: India's tax-free-after-5-years rule and the EPS pension mechanics are covered in What Happens to Your PF Account When You Move Abroad. How the withdrawal should be treated on an Australian return is a good specific question for a preparer familiar with Indian retirement accounts.
- Sending money between the two countries: not itself a tax event, and Australia has no gift tax on personal transfers, but see How to Send Money From Australia to India for the cost side of choosing a provider.
Key deadlines
- 31 October: lodgment deadline for self-lodgers, and the deadline to be registered with a tax agent to qualify for their generally later lodgment program deadline.
- 21 November: payment deadline for self-lodgers, which is separate from and doesn't move with a later lodgment date under a tax agent.
- Foreign income and the foreign-assets question are reported together in the individual tax return's foreign income section.
Why the order of operations matters
Handle the India-side DTAA claim first where you can. Getting Form 41 and your ATO Certificate of Residency in place before India withholds tax means less gets withheld at source, and it leaves a cleaner figure to claim through the Foreign Income Tax Offset, which is not refundable and cannot be carried forward if you end up with more than the cap allows in a given year. Filing the India side late, or not at all, tends to cost real money that a capped, non-carryforward offset can't fully make up for later.
Frequently asked questions
How does the ATO decide if I count as an Australian tax resident?
Mainly through the 'resides' test, which looks at your actual behavior and connections: physical presence, family, employment, and social ties. If that doesn't clearly resolve it, three backup tests apply: the domicile test (your legal domicile, unless you can show a permanent home overseas), the 183-day test (present more than half the income year), and a superannuation test for certain government employees posted abroad.
Does my visa or citizenship status matter for these tests?
Less than you might expect. The domicile test is the one most closely tied to legal status, but the resides test, which is checked first, is about your actual behavior and connections rather than your visa category. A temporary visa holder with strong ties to Australia can satisfy it, just as an Australian citizen with weak ties can fail to.
Where do I start if I've never reported Indian income on an Australian return before?
Talk to a registered tax agent experienced with foreign income and the Foreign Income Tax Offset specifically. One practical bonus: if you register with a tax agent by 31 October, you generally get more time to lodge than the standard self-lodger deadline, which is worth knowing if this is your first time dealing with India-source income on an Australian return.