Australian Tax Guide for NRIs: Residency, Income, Superannuation and More

Australian tax complexities decoded for NRIs

Whether you’re working in Australia, planning to return, or just managing investments there, understanding how Australian tax applies to you is crucial. Your tax liability doesn’t just depend on where you live—it depends on your visa, your intent to stay, and your income sources.

Let’s break it down, simply and clearly.

1. What’s Your Tax Residency Status?

Your tax residency determines how much of your income is taxed in Australia. There are three categories:

Residency TypeDescriptionTax Treatment
ResidentLived in Australia >183 days, intends to stay, or has ties like job/homeTaxed on worldwide income
Non-ResidentNo significant ties, usually lives overseasTaxed only on Australian-sourced income
Temporary ResidentLives and works in Australia on temporary visa; not eligible for social benefitsExempt from tax on most foreign income

Important: Australian residents must file a return if their income exceeds AUD 18,200. Non-residents (including NRIs) also need to file if they have any Australian income, such as rent or capital gains.

2. Income Tax Rules for Australian NRIs

Income is taxed differently based on residency status. Here’s how it works for different income types:

A. Employment and Business Income

Residency TypeTax Rules
ResidentTaxed on global salary and business income
Non-ResidentTaxed only on Australian-source salary or business income
Temporary ResidentExempt from foreign investment income, but taxed on employment income in Australia

B. Dividends and Investment Income

Income TypeResidentNon-ResidentTemporary Resident
Australian DividendsTaxed with franking creditWithholding tax of 15–30% on unfranked portionTaxed; foreign income exempt
Foreign DividendsTaxed, foreign tax credit availableNot taxableNot taxable

C. Interest, Royalties, and Rental Income

Income TypeResidentNon-ResidentTemporary Resident
Interest IncomeFully taxable, with deductions10% withholding taxExempt from interest withholding tax
Rental IncomeFully taxableFully taxableFully taxable
RoyaltiesFully taxable30% withholding tax (10–15% under DTAA)Depends on structure

3. Australian Income Tax Rates (FY 2024–25)

A. For Residents

Income RangeTax Rate
$0 – $18,200Nil
$18,201 – $45,00016% on income above $18,200
$45,001 – $135,000$4,288 + 30% on income above $45,000
$135,001 – $190,000$31,288 + 37% on income above $135,000
Above $190,000$51,638 + 45% on income above $190,000

Note: You can earn up to $22,575 before tax applies, when Low Income Tax Offset is considered.

B. For Non-Residents

Income RangeTax Rate
$0 – $135,00030%
$135,001 – $190,00037%
Above $190,00045%

Non-residents don’t get a tax-free threshold. Tax starts from the first dollar.

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4. Capital Gains Tax (CGT) for NRIs

Capital gains apply when you sell assets like property or shares. What you pay depends on your residency:

Residency TypeWhat’s TaxedCGT Discount?
ResidentWorldwide gains, including foreign property and shares50% (if asset held >1 year)
Non-ResidentOnly Taxable Australian Property (TAP)No (unless asset held before 8 May 2012)
Temporary ResidentOnly TAP; foreign assets usually exemptNo

What counts as TAP?

  • Australian real estate
  • Shares in land-rich Australian companies
  • Business assets in Australia
  • Rights/options linked to Australian property

If you’re leaving Australia permanently, you might be subject to a deemed capital gain on non-TAP assets unless you defer.

5. Medicare Levy and Surcharge

If you’re eligible for Medicare (Australia’s public health system), a 2% Medicare Levy is applied to your taxable income.

ConditionLevy TypeAmount
Medicare-eligible residentStandard Levy2% of taxable income
High-income resident without private insuranceLevy Surcharge1% to 1.5% extra
Non-resident / Temporary resident without accessUsually exemptNone

6. Double Taxation Avoidance (DTAA) – India and Australia

India and Australia have a DTAA agreement that allows you to avoid paying tax on the same income in both countries.

How it works:

  • You report the foreign income in Australia
  • Claim a tax credit for the tax already paid in India (or vice versa)
  • The credit is limited to the lower of the two amounts
  • You can’t carry forward unused credits

7. Superannuation: What NRIs Should Know

Superannuation is a retirement savings system in Australia. Employers contribute 11.5% of your salary into a super fund.

Key Points for NRIs:

FeatureDetails
Employer Contribution Rate11.5% of salary
Tax on Contributions15% inside the fund
Withdrawal Before Age 60Not allowed unless under specific rules
Leaving Australia (Temp Visa)Can apply for DASP refund
Tax on DASP WithdrawalsYes, taxed depending on components

Superannuation is a tax-effective way to save for retirement, but strict rules apply.

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8. Filing Your Australian Tax Return: Key Details for FY 2024–25

This section is especially important for NRIs who:

  • Earn income from Australian property, shares, or businesses
  • Are employed or have worked in Australia in this financial year
  • Have income from both India and Australia
DetailsInformation
Tax Year1 July 2024 – 30 June 2025
Return Due Date31 October 2025 (if lodging yourself)
Extended DeadlinesNot available unless you’re registered with a tax agent before 31 Oct (not applicable to most NRIs)
Who Must File– Australian residents earning over AUD 18,200- NRIs with Australian income (rent, capital gains, etc.)- Individuals with income in both India and Australia
What to Include in Return– Salary income- Capital gains- Rent- Interest/dividends- Foreign income (especially Indian)- Deductions (work expenses, tax agent fees, etc.)

If you’re unsure whether you need to file, it’s best to consult a tax advisor to avoid penalties or missed deductions.

Should You Talk to a Tax Expert?

Australian tax can be tricky—especially if you’re juggling income from multiple countries. Your tax status can change easily, and missing a deduction or making an incorrect claim may lead to penalties or double tax.

If you:

  • Stayed in Australia for more than 6 months
  • Own property or receive income from Australian sources
  • Have income in both India and Australia
  • Plan to leave or apply for PR soon

Then it’s worth speaking to someone who understands the tax laws of both countries.

Need Help?

We can connect you with trusted Australian tax advisors who specialise in NRI cases. You’ll get:

  • A free initial consultation
  • Clarity on your tax residency and reporting obligations
  • Help with DTAA claims, tax return filing, and more

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