Tax for Indians in the UK with income in India, explained

About 1.9 million people in England and Wales described themselves as Indian at the 2021 Census, and many still earn something in India: interest on a deposit, rent from a flat, dividends from shares bought years ago. The question every April is the same. Who taxes it, the UK, India or both?

The answer changed for good on 6 April 2025, when the UK scrapped the old "non-dom" rules. Here's how it works now, under UK and Indian law and the India–UK tax treaty, as checked on 26 October 2026.

Key points

• A UK resident is taxed by the UK on worldwide income, including income in India, as it arises. Domicile no longer matters.
• People arriving after 10 consecutive years outside the UK can claim the new FIG regime: no UK tax on foreign income and gains for their first four tax years of residence.
• India taxes non-residents only on Indian income. The treaty caps Indian tax on interest at 15% and on most dividends at 10%.
• The UK gives credit for Indian tax on the same income under Article 24 of the treaty.
• A UK–India social security agreement has been in force since 15 July 2026.

Step one: where are you resident?

Each country decides residence by its own rules, for its own tax year.

• UK: the Statutory Residence Test, for the tax year 6 April to 5 April. Spending 183 days or more in the UK makes you resident; fewer days can still do it, depending on your ties (home, work, family).
• India: the day-count tests for the tax year 1 April to 31 March. Most Indians working in the UK are non-residents of India if they spend fewer than 182 days there. Our NRI tax explainer has the full tests, including the 120-day rule for high Indian incomes.

If both countries treat you as resident in the same year, typically the year you move, the treaty's tie-breaker (Article 4) looks at your permanent home, then your centre of vital interests, then where you usually live, then nationality.

Step two: what the UK taxes

The end of non-dom

Until April 2025, many Indian-born UK residents could claim the remittance basis: foreign income was taxed in the UK only if brought into the UK. That's gone. From 6 April 2025, UK residents are taxed on foreign income and gains as they arise, whatever their domicile.

The four-year FIG regime

In its place, the foreign income and gains (FIG) regime gives relief to newcomers. HMRC's guidance says you qualify if you were not UK resident for at least 10 consecutive tax years before arriving. For your first four tax years of UK residence, you can claim that foreign income and gains aren't taxed in the UK, and bring the money in later without extra UK tax.

The catches: you claim it each year, source by source, on your Self Assessment return; and claiming means losing your personal allowance (£12,570) and the capital gains annual exemption for that year. For someone with small Indian interest, the trade may not be worth it.

Why it matters: Most Indians who moved to the UK on Skilled Worker, student or health and care visas in the last few years never lived there before, so they're likely to qualify for the FIG regime in their first four years. Those who've been in the UK longer can't. Knowing which group you're in decides whether your Indian interest and rent are taxed in the UK at all. For readers in India, it explains why UK relatives now ask for full Indian income statements.

Step three: what India taxes

As a non-resident of India, you're taxed in India only on income that arises in India or is received there:

A common surprise: NRE interest is tax-free in India but fully taxable in the UK for a UK resident not using the FIG regime.

A worked example

Meera has lived in Leeds since 2017 and pays UK higher-rate tax. In the 2026-27 tax year her NRO deposit earns ₹2,00,000 of interest, about £1,580 at ₹126.7 to the pound.

• India: with a UK tax residence certificate and the Indian self-declaration form, her bank deducts 15%, or ₹30,000 (about £237). Without them, it would deduct about 31%.
• UK: she reports £1,580 of foreign savings income. If her £500 higher-rate savings allowance is already used by UK interest, the UK tax is 40%, or £632.
• Credit: she claims foreign tax credit relief of £237, so she pays £395 more to HMRC.

Her total tax is £632, the same as on UK interest. She files on Self Assessment by 31 January after the tax year ends.

How to claim each side

In India

1. Get a certificate of UK tax residence from HMRC.
2. File the Indian self-declaration form on the income tax portal (Form 10F under the old rules) and give it to your bank with your PAN.
3. File an Indian return to claim back any excess TDS.

In the UK

1. Report Indian income on the foreign pages of your Self Assessment return.
2. Claim foreign tax credit relief, capped at the UK tax on that income.
3. Keep Indian TDS certificates and bank statements, converted at the rates HMRC accepts.

Other things to know

• Social security. The India–UK Double Contribution Convention, signed in February 2026, came into force on 15 July 2026 alongside the trade agreement. Workers posted from one country to the other can keep paying only into their home system for up to five years.
• Inheritance tax. Since April 2025, UK inheritance tax is based on long-term residence, broadly 10 of the last 20 tax years, not domicile. Long-term residents can be liable on worldwide assets, including property in India.
• Moving money. Our guide to the real cost of sending money covers fees and spreads, and NRE, NRO and FCNR accounts explains which account to use.

The 2025 changes made UK tax on Indian income simpler in one way: for most long-term residents, everything is taxable and Indian tax is credited. The decisions that matter are whether you're new enough to use the FIG regime, and whether your bank in India has the forms to charge the treaty rate.

Last checked: 26 Oct 2026. This explainer is general information, not tax advice. Consult a qualified tax adviser in each country for your situation.