Neutral impactEconomy
UK Pension Income: how is it taxed for NRIs in India?
Mint 1 hr ago·13 Oct 2026, 12:46 pm
For Non-Resident Indians (NRIs) receiving pension income from the UK, tax treatment in India depends on their residency status. If you qualify as a Resident and Not Ordinarily Resident (RNOR) for a specific year, the pension is generally tax-free in India. However, once you transition to being a Resident and Ordinarily Resident (ROR), this income is taxed as 'salary' under Indian law, regardless of whether the funds remain in a UK bank account.
This change can significantly impact your tax liability. While the UK pension scheme itself is not taxed in the UK, the Indian tax code now treats the money as domestic earnings. Investors must ensure they file their returns correctly to avoid penalties. It is crucial to track your residency status carefully to manage these tax obligations effectively.
Excerpt from Mint
A returning NRI’s UK workplace pension is tax-free in India while they qualify as RNOR, but becomes taxable as salary income once they become ROR, even if it remains in a UK bank account. I am a retired Non-Resident Indian (NRI) living in the UK for over four decades and plan to relocate permanently to India. I…Read the original at Mint
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