Smith sustained the injury wile diving in the field during the fifth ODI on Sunday but is expected to be fit for the start of Australia's domestic season.
Australia captain Steve Smith to miss T20 series in India with shoulder injury
Australia captain Steve Smith will return home from the tour of India due to a shoulder injury, Cricket Australia announced just hours before the opener of a three-match Twenty20 series on Saturday.
Smith hurt his right shoulder diving in the field during the fifth and final one-day international against India at Nagpur on Sunday, adding injury to the insult of a 4-1 series loss for the visitors.
- Pakistan v Sri Lanka: Karunarante century sets up Sri Lanka on Day 1 in Dubai
- The Ashes: Ben Stokes not travelling with England squad to Australia
- Rashid Khan: Even suicide blast can't stop rising Afghan cricket star
The board said an MRI scan had ruled out any serious injury and the 28-year-old would be fit for the start of the domestic season and lead Australia against arch-rivals England at home in the Ashes series starting on November 23 in Brisbane.
"Following the (Nagpur) match, he (Smith) complained of shoulder soreness, which has not settled and is restricting his ability to bat and throw," team doctor Richard Saw said.
"Subsequently he has had an MRI scan which has excluded serious injury but we believe the best course of action is for him to not continue to aggravate his shoulder and allow it to recover.
"He will have further investigation upon his return to Australia but we remain confident he will be available for the start of the Sheffield Shield season."
Vice-captain David Warner will lead Australia in the Twenty20 series, while allrounder Marcus Stoinis will replace Smith in the squad, Cricket Australia added in a statement.