How to File ITR as NRI in India — Complete 2026 Guide

NRI ITR filing obligation: NRIs must file Indian ITR if: (1) India-sourced income exceeds Rs2.5 lakh in the financial year. India-sourced income includes: salary for work done in India, rental income from Indian property, capital gains from sale of Indian assets (property, stocks, MF), interest from NRO accounts, interest from Indian FDs, dividends from Indian companies. (2) TDS has been deducted from any India income and refund is due. Common scenario: NRO FD interest with 30% TDS, actual tax liability at 20% — file ITR to claim Rs10% refund. (3) Capital gains from Indian stocks or MF redemptions. Even small amounts of equity MF redemption create ITR filing obligation. NRIs with ONLY NRE account interest: NRE interest is tax-exempt — no ITR filing obligation from NRE income alone. NRIs with ONLY NRE FD and no other India income: technically may not need to file. Recommended practice: file even when not strictly required — establishes tax residency record and facilitates future repatriation compliance.

NRI income tax slabs (FY 2025-26): NRIs pay income tax on India-sourced income at the same slab rates as resident Indians. New regime (recommended for most NRIs who have limited India deductions): Up to Rs3L: 0%. Rs3-7L: 5%. Rs7-10L: 10%. Rs10-12L: 15%. Rs12-15L: 20%. Above Rs15L: 30%. Key NRI differences from resident: NRIs cannot claim 87A rebate (the Rs25,000 rebate that makes income up to Rs12L zero-tax for residents). NRIs cannot claim HRA exemption (not earning salary in India typically). NRIs can claim Section 80C, 80D, NPS deductions if applicable but many of these instruments (PPF, ELSS, NSC) require resident status. NRIs can invest in NPS — and can claim 80CCD deductions in old regime. Capital gains for NRIs: LTCG on listed equity MF — 12.5% (same as resident). LTCG on property — 12.5% or 20% with indexation (same as resident). STCG on listed equity — 20% (same as resident). TDS for NRIs: higher TDS deducted than resident rates — NRI must file ITR to claim refund of excess TDS.

DTAA (Double Tax Avoidance Agreement) in NRI ITR: India has DTAA with 90+ countries including US, UK, UAE, Canada, Singapore, Germany, Netherlands, Australia. How DTAA helps NRIs: prevents the same income being fully taxed in both India and country of residence. How to claim in Indian ITR: DTAA benefit is claimed in Schedule TR (Tax Relief under DTAA) in ITR-2 or ITR-3. Required: foreign tax payment proof (Form W-2 for US, tax certificate from foreign country), DTAA provisions applicable to the specific income type, Tax Residency Certificate (TRC) from the foreign country certifying NRI is tax resident there (required to claim treaty benefit in India). TRC requirement: since Budget 2012, India requires TRC before allowing DTAA benefits. Obtain TRC from tax authority of your country of residence. Common DTAA benefits: UAE DTAA: India-UAE treaty prevents India from taxing certain UAE-sourced income. US DTAA: specific provisions for dividend, interest, and capital gains treatment. No DTAA with some countries: if your country has no DTAA with India, India taxes India-sourced income fully. Claim foreign tax as deduction (Section 91) but no treaty benefit available.

NRI ITR form selection: ITR-2: most NRIs who have salary (from India), rental income, capital gains from property, equity, or mutual funds, and foreign assets use ITR-2. Covers most NRI situations. ITR-3: if NRI has business or professional income from India (consulting, freelancing with Indian clients). ITR-1 (Sahaj): NRIs cannot use ITR-1 — ITR-1 is only for residents. Even simple NRI situations require ITR-2. How to file: login to incometax.gov.in using PAN. Select AY (Assessment Year for the financial year ending March). Select ITR-2 (or ITR-3). Key sections to complete: Schedule S (salary if India-sourced), Schedule HP (house property — rental income minus 30% standard deduction minus property tax), Schedule CG (capital gains from India assets), Schedule OS (other income — NRO interest, dividends), Schedule FSI (Foreign Source Income — even if exempt as RNOR, declare here), Schedule TR (DTAA relief), Schedule FA (foreign assets — required once ROR status). E-verify using Aadhaar OTP linked to Aadhaar-registered mobile, or via Net Banking EVC, or by sending signed ITR-V to CPC Bengaluru.

Schedule FSI (Foreign Source Income) is an ITR schedule where you declare income earned outside India. Who needs to complete Schedule FSI: RNOR status filers: foreign income is exempt but must still be declared in Schedule FSI. This declaration with the exemption claim is mandatory. ROR status filers: all foreign income declared and taxed in India — Schedule FSI captures the gross amount, the country, and the foreign tax paid. Schedule FSI details to enter: country of source, nature of income (salary, dividends, rental, pension), amount in foreign currency, Indian rupee equivalent, tax paid in foreign country, DTAA article applicable (if claiming treaty benefit). Common NRI mistakes in Schedule FSI: not declaring foreign income as RNOR (assuming exemption means no declaration needed), not attaching TRC when claiming DTAA benefit, using incorrect exchange rates (use RBI reference rate for the date of income receipt). Penalty for non-declaration: as ROR, Schedule FA must list foreign assets and Schedule FSI must list foreign income. Black Money Act applies to material non-disclosure. Even as RNOR, non-declaration creates compliance risk if CBDT queries why foreign income is absent from returns.