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By the NRIWallah team · Updated June 2026
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If you are an Indian national living and working in the UK, you are subject to the UK income tax system. The good news is that the system is well-structured and the rules are clear once you understand the basics. The not-so-good news is that as an NRI, you likely have income or assets in India too, which adds a layer of complexity that most UK tax guides simply ignore.
The UK operates a progressive tax system with a tax-free Personal Allowance and several tax bands above it. For the 2025-26 financial year, the first GBP 12,570 of your income is tax-free. Income above that threshold is taxed at 20% (basic rate), 40% (higher rate), or 45% (additional rate) depending on which band it falls into. National Insurance contributions are charged separately on employment income and add to your effective tax rate.
Most NRIs in the UK are employed and have tax deducted at source through PAYE (Pay As You Earn), which means their employer handles the basics. But PAYE only covers your UK employment income. If you have other sources of income, you will need to file a Self Assessment tax return.
You must file a Self Assessment return if you receive rental income from property (in the UK or India), have self-employment income, earn more than GBP 150,000 per year, or receive untaxed income from investments. Many NRIs who own property in India and receive rental income are surprised to learn that this income is reportable in the UK, even if tax has already been deducted in India.
The Double Taxation Avoidance Agreement between the UK and India is what prevents you from being taxed twice on the same income. Under the treaty, if you pay tax on your Indian rental income in India, you can claim a Foreign Tax Credit on your UK return for the tax already paid. This does not eliminate the obligation to report the income, but it ensures you are not paying full tax in both countries. Our DTAA estimator can help you understand how much relief you may be entitled to.
Use the 2025-26 calculator if you are estimating tax for the current financial year (April 2025 to April 2026). If you are filing for the previous year or need to compare how your tax position has changed, use the 2024-25 calculator .
Both calculators are built specifically for NRIs: they include Indian income fields, DTAA relief calculations, and NI contributions, giving you a clearer picture than generic UK tax calculators. For broader UK-specific NRI guidance on visas, banking, and settling in, visit the NRI Hub UK .
