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 Type | Description | Tax Treatment |
| Resident | Lived in Australia >183 days, intends to stay, or has ties like job/home | Taxed on worldwide income |
| Non-Resident | No significant ties, usually lives overseas | Taxed only on Australian-sourced income |
| Temporary Resident | Lives and works in Australia on temporary visa; not eligible for social benefits | Exempt 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 Type | Tax Rules |
| Resident | Taxed on global salary and business income |
| Non-Resident | Taxed only on Australian-source salary or business income |
| Temporary Resident | Exempt from foreign investment income, but taxed on employment income in Australia |
B. Dividends and Investment Income
| Income Type | Resident | Non-Resident | Temporary Resident |
| Australian Dividends | Taxed with franking credit | Withholding tax of 15–30% on unfranked portion | Taxed; foreign income exempt |
| Foreign Dividends | Taxed, foreign tax credit available | Not taxable | Not taxable |
C. Interest, Royalties, and Rental Income
| Income Type | Resident | Non-Resident | Temporary Resident |
| Interest Income | Fully taxable, with deductions | 10% withholding tax | Exempt from interest withholding tax |
| Rental Income | Fully taxable | Fully taxable | Fully taxable |
| Royalties | Fully taxable | 30% withholding tax (10–15% under DTAA) | Depends on structure |
3. Australian Income Tax Rates (FY 2024–25)
A. For Residents
| Income Range | Tax Rate |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16% 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 Range | Tax Rate |
| $0 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| Above $190,000 | 45% |
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 Type | What’s Taxed | CGT Discount? |
| Resident | Worldwide gains, including foreign property and shares | 50% (if asset held >1 year) |
| Non-Resident | Only Taxable Australian Property (TAP) | No (unless asset held before 8 May 2012) |
| Temporary Resident | Only TAP; foreign assets usually exempt | No |
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.
| Condition | Levy Type | Amount |
| Medicare-eligible resident | Standard Levy | 2% of taxable income |
| High-income resident without private insurance | Levy Surcharge | 1% to 1.5% extra |
| Non-resident / Temporary resident without access | Usually exempt | None |
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:
| Feature | Details |
| Employer Contribution Rate | 11.5% of salary |
| Tax on Contributions | 15% inside the fund |
| Withdrawal Before Age 60 | Not allowed unless under specific rules |
| Leaving Australia (Temp Visa) | Can apply for DASP refund |
| Tax on DASP Withdrawals | Yes, 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
| Details | Information |
| Tax Year | 1 July 2024 – 30 June 2025 |
| Return Due Date | 31 October 2025 (if lodging yourself) |
| Extended Deadlines | Not 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
