NRI Tax Filing Overview – Income Tax for Non-Resident Indians in India | NDS Avla

NRI Tax Filing Overview – Income Tax Compliance for Non-Resident Indians in India

Q: Which ITR form should an NRI use?

Most NRIs should file ITR-2 covering house property, capital gains, and other income. NRIs with business income should file ITR-3. ITR-1 is not available to NRIs. Schedule FA and Schedule FSI are not required for NRIs.

Q: What is the due date for NRIs to file their Indian income tax return?

The standard due date is July 31 of the assessment year. Belated returns can be filed up to December 31 with a late fee under Section 234F of up to ₹5,000.

Q: Can NRIs claim deductions under Chapter VI-A?

NRIs can claim limited deductions — Section 80C for life insurance, ELSS, home loan principal; Section 80D for health insurance. NRIs opting for Chapter XII-A special regime cannot claim any Chapter VI-A deductions.

End-to-End Income Tax Filing, Advisory & Representation Services for NRIs, PIOs & OCI Cardholders

India's income tax system taxes Non-Resident Indians (NRIs) on income that accrues, arises, or is received in India — regardless of where the individual is based. If you earn rental income from Indian property, receive interest on NRO accounts, sell Indian shares or real estate, or receive dividends from Indian companies, you have Indian income tax obligations. Understanding and managing these obligations is the starting point of all NRI tax compliance.

NRI tax filing in India is distinct from regular resident tax filing in several critical ways: the applicable ITR form differs, the scope of taxable income is limited to Indian sources, special provisions under Chapter XII-A may apply, and residential status must be determined afresh every year. Our NRI tax filing services cover the complete lifecycle — from residential status determination and return filing to exempt income identification, repatriation planning, and litigation support.

Our NRI Tax Filing Services at a Glance

Residential Status Determination

Accurate year-by-year determination of NRI, RNOR, or Resident status under Section 6 of the Income Tax Act — the foundation of all NRI tax planning and compliance in India.

Income Tax Return Filing (ITR-2 / ITR-3)

Preparation and e-filing of Indian income tax returns for NRIs covering rental income, capital gains, interest, dividends, and other India-sourced income with correct TDS credit claims.

DTAA Advisory & Treaty Benefits

Identification and application of Double Taxation Avoidance Agreement benefits under India's treaties with 90+ countries to prevent double taxation and reduce Indian tax liability.

TDS Reconciliation & Refund Claims

Reconciliation of TDS in Form 26AS and AIS with actual deductions, and filing returns to claim full refunds of excess TDS on rental, interest, and property sale income.

Capital Gains Tax Planning

Computation and planning of capital gains on sale of Indian property, listed shares, mutual funds, and other assets — with reinvestment exemptions under Sections 54, 54EC, and 54F.

NRI Notice & Litigation Support

Response to scrutiny notices, demand notices, and reassessment proceedings for NRIs before Indian tax authorities — handled remotely through registered power of attorney.

Why NRI Tax Filing Requires Specialist Expertise

Residential status must be determined individually for every financial year — it can change year to year
NRIs are taxed at flat rates (30% on most income) without slab benefits unless DTAA provides relief
Buyers of NRI-owned property must deduct TDS at 20–30% — incorrect TDS triggers demands on the NRI
DTAA benefits require proactive filing of Form 10F and Tax Residency Certificate — these are not auto-applied
Special Chapter XII-A provisions offer significant tax savings that are widely underutilized
Multi-year non-compliance attracts interest under Sections 234A, 234B, 234C and penalties under Section 271F
Repatriation of funds requires tax clearance and Form 15CA/CB — non-compliance is a FEMA violation

Frequently Asked Questions – NRI Tax Filing in India

Who is required to file an income tax return in India as an NRI?

An NRI must file an income tax return in India if their total taxable income from Indian sources exceeds ₹2.5 lakh in the financial year. This threshold is lower than that for residents — NRIs do not get the enhanced ₹3 lakh basic exemption. Filing is also required to claim TDS refunds, carry forward capital losses, and avail treaty benefits under DTAA even when income is below the threshold. NRIs with only NRE account interest (which is fully exempt) and no other India income generally have no filing obligation.

What income of an NRI is taxable in India?

NRIs are taxed in India only on income that accrues or arises in India, or is received in India. This includes: rental income from Indian property; capital gains on sale of Indian property, shares, or mutual funds; interest on NRO accounts; dividends from Indian companies (taxable since FY 2020-21); salary for services rendered in India; and any business income from a business controlled in India. Income earned entirely abroad and received abroad is not taxable in India for NRIs.

Which ITR form should an NRI use to file their return?

Most NRIs should file ITR-2, which covers income from salary/pension, house property (rental income), capital gains, and other sources. NRIs with business or professional income in India should file ITR-3. ITR-1 (Sahaj) is not available to NRIs. The Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income) do not need to be filled by NRIs — those schedules are mandatory only for Resident and Ordinarily Resident taxpayers.

What is the due date for NRIs to file their Indian income tax return?

The standard due date for NRIs without audit requirements is July 31 of the assessment year (e.g., July 31, 2025 for FY 2024-25). NRIs whose Indian accounts require audit have an extended deadline of October 31. A belated return can be filed up to December 31 of the assessment year with a late fee under Section 234F — ₹5,000 (or ₹1,000 if total income is below ₹5 lakh). Interest under Section 234A also applies on belated returns where tax is due.

Can NRIs claim deductions under Chapter VI-A (80C, 80D, etc.)?

NRIs can claim limited deductions under Chapter VI-A. Section 80C is available for life insurance premiums, PPF contributions (if the account was opened when they were resident), ELSS mutual fund investments, and home loan principal repayment on Indian property. Section 80D is available for health insurance premiums. However, several deductions are not available to NRIs — including investment in NSC, Senior Citizens Savings Scheme, and 5-year Post Office Deposits. NRIs opting for the special Chapter XII-A regime cannot claim any Chapter VI-A deductions.

Need Help with Your NRI Tax Filing in India?

Our specialists handle the complete NRI tax compliance cycle — from residential status advisory and return filing to notices and repatriation. We work remotely with NRIs across all countries.