NRI taxation in India isn't a simple variation of regular taxation. It's a different rulebook, built on a different core principle, and trying to apply resident rules to an NRI situation gets things wrong in ways that are easy to miss and expensive to discover late.
India's day count runs on the financial year, April to March, not the calendar year. Tracking days against the wrong calendar produces the wrong residency status, which then miscalculates everything built on top of it. Residency is also reassessed every year on its own count, not assumed to carry forward from the year before.
India taxes based on where income is sourced, not who pays it or where it's received. Working remotely for a foreign employer while physically in India makes that salary India-sourced, fully taxable here, regardless of which country the paycheque comes from.
Similarly, foreign rental income becomes India-taxable the moment it's credited directly into an Indian account, even though the property itself is abroad.
An NRI cannot legally hold an ordinary resident savings account. It must be converted to NRO or closed. Depositing India-sourced income like rent or dividends into an NRE account is a separate, common error, since NRE is meant for foreign-sourced money only.
The USD 250,000 LRS limit governs residents sending money out of India. The USD 1 million NRO facility governs NRIs bringing their own Indian money home. They are separate schemes for separate people, and mixing them up leads to either needless caution or a wrong assumption about how much you can move.
PIS is required for direct equity trades, not for mutual funds, so assuming you need a PIS account to buy a mutual fund adds an unnecessary step. Separately, US and Canada-based NRIs who don't check an AMC's acceptance policy in advance can find their application declined outright, due to the FATCA-related compliance burden many fund houses simply avoid.
Schedule FA disclosure is a resident-only requirement. NRIs holding foreign brokerage accounts or investments have no obligation to report them to India through Schedule FA. Assuming otherwise leads to unnecessary compliance work, or worse, unnecessary anxiety about a rule that was never yours to follow.
NRI withholding is deliberately heavy, and there are two tools that bring it down: a Section 197 lower-deduction certificate for one-off transactions, and a Tax Residency Certificate with Form 10F for the DTAA rate on recurring income.
Simply accepting the default rate as final, without applying either tool or filing a return to reclaim the excess, means paying more tax than you actually owe.
If Indian property was purchased using NRE or FCNR funds, the original investment amount can be repatriated outside the USD 1 million NRO cap, with only the capital gain subject to it.
Failing to trace and document that original funding source means losing access to this exception entirely, and having the full sale proceeds counted against the cap unnecessarily.
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