An Individual Savings Account is a UK tax wrapper. Each tax year, which runs from 6 April to 5 April, a UK-resident adult can put up to £20,000 into ISAs. Interest, dividends and gains inside an ISA are free of UK income tax and capital gains tax, and money taken out is not taxed. The cap on cash ISAs that had been planned for April 2027 was dropped in the Budget, so the £20,000 limit stays.
Outside the wrapper, a UK resident is taxed on savings interest, dividends and gains, and that includes income from India. This page makes two comparisons with your own assumptions: first cash, then shares. If you leave the UK you can keep an ISA, but you cannot pay into it while you are non-resident, and you can pay in again if you return and become UK resident.
Part 1: cash in an ISA, an NRE savings account or an NRE fixed deposit
A cash ISA comes in two common forms. A fixed-term cash ISA pays a rate fixed for a set term and usually ties the money up, with limits on early access. An easy-access cash ISA lets you withdraw when you like, and its rate can change. Interest in either is free of UK tax.
In India, an NRE savings account is a rupee account for money from abroad. Its rate is set by the bank and can change, and you can withdraw freely. An NRE fixed deposit locks money for a term, usually pays a higher rate, and closing early normally carries a penalty. Interest on both is tax-free in India while you are an NRI, and the money can be sent back abroad. See our guides to NRI banking and the current NRE FD rates.
A UK-resident taxpayer is generally taxed in the UK on NRE interest, as savings income, at 20%, 40% or 45% by band, after a personal savings allowance of £1,000 for basic-rate and £500 for higher-rate taxpayers. Those rates rise from April 2027, as covered in our UK Budget guide. The rupee matters as much as the rate: a higher rupee rate can be offset if the rupee weakens against the pound.
Reading the cash results
The calculator lines up the four options. It pairs them like for like: the NRE fixed deposit against the fixed-term ISA, and the NRE savings account against the easy-access ISA, because the first pair both lock money in and the second pair both let you withdraw. For each pair it shows the difference in pounds and the yearly rupee movement at which the two end level. For a pure rate comparison without ISA or UK tax rules, see the FD calculator for India or abroad.
Part 2: shares in a stocks and shares ISA or an NRE demat account
A stocks and shares ISA holds funds, shares and similar investments. Dividends and gains are free of UK tax, and selling inside the ISA does not trigger capital gains tax. Platforms charge fees, which the calculator leaves out.
The India side is an NRE share account: an NRE bank account linked to a demat and trading account that lets an NRI buy Indian shares. Our guide to the difference between NRI and resident demat accounts explains how the accounts fit together. Indian tax applies to dividends, often with tax withheld at 20% for an NRI unless a treaty rate is claimed, and to gains. Listed shares held for more than a year are taxed at 12.5% above ₹1.25 lakh. A UK resident is taxed in the UK as well, on dividends above a £500 allowance and on gains above £3,000 at 18% or 24%, with credit for Indian tax up to the UK amount. Our DTAA estimator shows how that credit works.
The calculator assumes direct listed shares. Indian mutual funds are usually treated differently in the UK, as offshore funds, which can tax gains as income. Our guide to the HMRC offshore funds letter explains.
Reading the shares results
Both sides start with the same growth and dividend figures, so the effect of tax and currency shows up on its own. The tool lists Indian tax, UK tax after credit and transfer costs line by line, gives the rupee movement at which the two end level, and shows how the difference changes across a range of rupee paths. Nothing in it is a forecast, and the defaults are examples you should replace. Check which UK tax band you fall in with the UK NRI tax calculator.
What to keep in mind
- Allowance. Money taken out of an ISA normally cannot be put back, and unused allowance for a year is lost when the year ends.
- Residence. If you become resident in India, the treatment of NRE interest and of overseas assets changes. The NRI day tracker counts your days.
- Rules change. Rates, allowances and thresholds are updated often.
General information for education, not financial, tax or investment advice and not a recommendation to buy, hold or sell any product. Figures are illustrative and depend on the assumptions you enter. Speak to a qualified UK and Indian tax adviser about your own position.
