Section 217 — NRI Becoming Resident | ITA 2025

Section 217 — - NRI BECOMING RESIDENT IN INDIA -- ELECTION TO CONTINUE NRI CONCESSION

Section 217 is the substantive equivalent of 1961 s. 115H -- procedural provision allowing an NRI who BECOMES RESIDENT in India to ELECT to continue receiving NRI-concessional treatment (under ss. 213-216) in respect of FX-asset investment income / LTCG, declared in the return of income filed. Useful for returning NRIs who have substantial pre-residence FX-asset investments and want continued concessional treatment for legacy holdings.

Statutory text — Income-tax Act, 2025

Marginal note -- NRI return of resident election

(1) Where a non-resident Indian in any tax year,—

(a) becomes assessable as a resident in India in respect of total income in a subsequent year; and

(b) furnishes a declaration in writing to the Assessing Officer along with his return of income under section 263 for the tax year for which he is so as- sessable, to the effect that provisions of sections 212 to 216 shall continue to apply to him in relation to the investment income derived from any foreign exchange asset referred to in section 212(e) other than shares in an Indian company, then the provisions of sections 212 to 216 shall continue to apply in relation to such income for that tax year and every subsequent tax year until the transfer or conversion (otherwise than by transfer) of such assets into money.

(2) A non-resident Indian may choose not to be governed by the provisions of sections 212 to 216 for any tax year by declaring it in his return of income under section 263 for such tax year, and if he does so,—

(a) the provisions of sections 212 to 216 shall not apply to him for that tax year; and

(b) his total income for that tax year shall be computed and charged to tax according to the other provisions of this Act. Tax on business income of Offshore Banking Units or International Financial Services Centre unit.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 217	INCOME-TAX ACT, 1961 -- s. 115H
NRI-becoming-resident continued NRI-regime election	1961 s. 115H

WHERE NRI BECOMES RESIDENT in any tax year, the assessee may CONTINUE to receive NRI-concessional treatment under ss. 212-216 in respect of FX-asset investment income / LTCG, by DECLARING SO in return of income u/s 263 for that tax year. Relief continues until: (a) the NRI transfers / converts the FX-asset into INR-acquired asset; (b) the assessee chooses to opt out. PRACTITIONER: returning NRIs (e.g., post-retirement coming back to India) can preserve concessional treatment for legacy NRO-FX investments without immediately transitioning to slab rates. Useful planning tool.

CROSS-REFERENCES

Section 6 -- Residence.
Sections 212-216 -- NRI substantive regime.
Section 263 -- Return of income.

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