UK NRI filing HMRC self-assessment and India ITR: double taxation and DTAA relief
UK tax residents must report worldwide income to HMRC including India-source NRO interest, rental income and capital gains. India taxes the same income. The UK-India DTAA (1993) and the UK Foreign Tax Credit mechanism avoid double taxation. India tax paid is credited against the UK tax due on the same income via HMRC's foreign income relief system.
India TDS paid on NRO income is credited against UK tax on self-assessment
UK tax residents earning India-source income (NRO interest, rent, capital gains) must declare it on HMRC self-assessment and pay UK tax on it. India has already taxed the same income via TDS. Under the UK-India DTAA, you can credit India tax paid against the UK tax due on that income, effectively paying the higher of the two rates — not both in full. Keep your India Form 16A (TDS certificate) as evidence.
Key points
- HMRC self-assessment: mandatory for India income — If you are UK tax resident with India-source income above the personal allowance threshold, you must register for and file HMRC self-assessment.
- UK-India DTAA Foreign Tax Credit — India TDS paid on NRO interest, rental income and capital gains can be offset against the UK tax charge on the same income via the foreign tax credit mechanism.
- NRO interest: treaty rate 15% — Under the UK-India DTAA Article 11, NRO interest withholding is capped at 15%. Claim the treaty rate via Form 15G (not available for NRIs) — instead, claim via ITR refund for excess TDS and credit the 15% against UK tax.
How UK-India DTAA works in practice
India source income flows: India pays interest, rent or dividends to your NRO account, deducting TDS at 30% (or 15% treaty rate for interest). You receive the net amount.
UK self-assessment: declare the gross India income on HMRC SA100 / SA106 (Foreign Income supplement). UK calculates tax on gross income at your marginal rate.
Foreign Tax Credit: the India TDS already paid is credited against UK tax on the same income. If India TDS (e.g. 30%) > UK rate (e.g. 20% basic rate), no UK top-up is due. If UK rate > India TDS, you pay the difference to HMRC.
Capital gains: UK imposes CGT on India property gains for UK residents. India also taxes LTCG at 12.5%. Credit the India LTCG tax against UK CGT — DTAA Article 13 provides relief.
HMRC filing timeline for India income
January 31 each year: HMRC self-assessment online filing deadline for the prior tax year (April 5 ending). For India income, this coincides with India's ITR filing having been completed the previous July.
Keep India Form 26AS and Form 16A to evidence TDS paid — HMRC may request this during an enquiry.
UK tax year: April 6 to April 5 (does not align with India's April 1 to March 31 — use the proportionate amounts for the UK year when the Indian year straddles two UK years).
Frequently asked questions
Does the UK-India DTAA cover NRE FD interest?
NRE interest is exempt from India tax. Under UK rules, it is still UK-taxable as foreign income (UK taxes UK residents on worldwide income). No India FTC is available since India did not tax it. Declare NRE interest on SA106.
Do I need to report India capital gains on HMRC if I already paid India LTCG tax?
Yes. UK taxes residents on worldwide capital gains. Report the India property gain on the CGT pages of self-assessment. Credit the India LTCG tax (12.5%) against UK CGT (18% or 24% depending on your income). You typically owe the difference to HMRC.
What is SA106 and when do I use it?
SA106 is HMRC's Foreign Income supplement — use it to declare non-UK income including NRO interest, India rental income and India dividends. It also has a section for foreign tax paid (the FTC claim).