If you are an Indian professional living in Dubai, London, Toronto, or Singapore, the annual ITR filing season probably brings confusion — does this apply to me? What do I include? Will I be taxed on my salary abroad? These are real questions, and they deserve straight answers.
This guide covers everything for NRI ITR filing for AY 2025-26, including what Budget 2025 changed, which form to use, and how to file without a CA for a straightforward return.
Who Must File an ITR as an NRI?
You must file if any of the following apply for FY 2025-26:
- Your India-sourced income exceeds ₹2.5 lakh
- TDS was deducted on NRO interest or a property sale and you want a refund
- You sold property or shares in India and have capital gains to declare
- You want to carry forward a capital loss to offset against future gains
Confirming Your Residential Status for AY 2025-26
You are an NRI for Indian tax purposes if you spent fewer than 182 days in India during FY 2025-26. Alternatively, if you spent fewer than 60 days in India and fewer than 365 days across the past 4 years combined, you are also an NRI. Indian citizens employed abroad use only the 182-day test.
What Indian Income Do NRIs Pay Tax On?
- Rental income from Indian property
- Interest on NRO accounts (NRE and FCNR interest is fully exempt)
- Capital gains from selling Indian property, stocks, or mutual funds
- Salary received in India for services rendered in India
- Dividends from Indian companies
Your overseas salary is not taxable in India and should not appear in your ITR.
What Budget 2025 Changed for NRI Filers
| Income Slab | New Regime (Default) | Old Regime (Opt-in) |
|---|---|---|
| Up to ₹3,00,000 | Nil | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% | 5% / 20% |
| ₹7,00,001 – ₹10,00,000 | 10% | 20% |
| ₹10,00,001 – ₹12,00,000 | 15% | 30% |
| ₹12,00,001 – ₹15,00,000 | 20% | 30% |
| Above ₹15,00,000 | 30% | 30% |
NRIs cannot claim the Section 87A rebate that makes resident income up to ₹7 lakh tax-free. NRIs pay tax from ₹3 lakh upward.
Which ITR Form Should You Use?
| Form | Who Uses It | NRI? |
|---|---|---|
| ITR-1 (Sahaj) | Simple salaried residents | Not available to NRIs |
| ITR-2 | NRIs with salary, rental, capital gains, NRO interest | Yes — most NRIs |
| ITR-3 | NRIs with Indian business/professional income | Yes — if business income |
💡 NRI investing in Indian stocks or mutual funds? You need a dedicated NRI Demat account. See our NRI Demat account guide →
How to File Your NRI ITR Online: Step by Step
- Gather documents: PAN, Aadhaar (if linked), Form 26AS, AIS, TDS certificates (Form 16A), NRO/NRE bank statements, sale deeds if property was sold.
- Log in to incometax.gov.in with your PAN and password.
- Check Form 26AS and AIS: Verify all TDS entries. Cross-check with AIS to catch income the department already knows about. Discrepancies trigger notices.
- Select ITR-2 for AY 2025-26.
- Choose your tax regime: New (default) or old. Run the calculation for both if you have Indian deductions.
- Fill income details: Rental income under House Property, NRO interest under Other Sources, capital gains in Schedule CG.
- Claim DTAA relief if applicable: Fill Schedule FSI and Schedule TR if India has a treaty with your country of residence.
- E-verify: Use Aadhaar OTP, net banking, or send ITR-V to CPC Bengaluru within 30 days. E-verification is faster.
Key Deadlines for AY 2025-26
| Deadline | Date | For |
|---|---|---|
| Standard filing | 31 July 2026 | Most NRI filers |
| Audit cases | 31 October 2026 | If tax audit required |
| Belated return | 31 December 2026 | With ₹5,000 penalty |
| Updated return (ITR-U) | Up to 2 years after AY end | Correction of errors |
Common Mistakes NRIs Make When Filing
- Using ITR-1: Not available to NRIs — results in a defective return notice
- Declaring foreign salary: NRI overseas income is not taxable in India — leave it out
- Ignoring NRO TDS: If income is below the taxable threshold, you are entitled to a full refund — but only if you file
- Not linking PAN with Aadhaar: Unlinked PANs attract higher TDS
- Forgetting to e-verify: An unverified return is treated as not filed
What this means for you
- File ITR-2 if Indian income exceeds ₹2.5L, you have capital gains, or TDS was deducted — ITR-1 is for residents only.
- Foreign salary and overseas savings are not taxable in India and should not appear in your ITR.
- New regime is now default — no Section 87A rebate for NRIs, but slabs are lower overall.
- Deadline: 31 July 2026. File on time to avoid ₹5,000 penalty and preserve right to carry forward losses.
- Claim DTAA relief in Schedule FSI and TR if applicable — don't forget Form 10F for UAE and other non-tax countries.
- E-verify your return immediately — an unverified return does not count as filed.
Frequently Asked Questions
No. You only need to file if your Indian-sourced income exceeds ₹2.5 lakh in the financial year, or if you want to claim a refund (for example, on TDS from NRO interest or a property sale). Filing also lets you carry forward capital losses.
Most NRIs with salary, rental income, capital gains, or NRO interest use ITR-2. If you have business or professional income in India, use ITR-3. ITR-1 (Sahaj) is not available to NRIs.
As an NRI, you are only taxed in India on income earned or accrued in India. Your foreign salary, overseas bank interest, and foreign investments do not go in your Indian ITR. Only India-sourced income is relevant.
The standard deadline is 31 July 2026. Audit cases extend to 31 October 2026. A belated return can be filed until 31 December 2026 with a penalty of ₹5,000 (₹1,000 if income below ₹5 lakh).
The new tax regime is now the default, with a basic exemption of ₹3 lakh. NRIs still cannot claim the Section 87A rebate. TDS on some NRO interest categories was rationalised. NRIs can still opt for the old regime if it results in lower tax after deductions.