A Complete Guide To Filing Income Tax Returns In India For NRI’s

Filing an Income Tax Return in India is a compliance obligation that millions of Non-Resident Indians must navigate every year — yet the rules change frequently, forms get updated, and the interplay between the new Income Tax Act 2025 and the outgoing Act of 1961 is causing fresh confusion. If you are an NRI with rental income, interest on your NRO account, capital gains from property or equity investments, or simply want to claim a TDS refund, this guide is written precisely for you. 

Whether you reside in the UAE, USA, UK, Canada, Australia, or anywhere else in the world, your obligation to file in India is governed by a single question: Do you have taxable income arising in India? This guide answers that question and every step that follows. 

If you need professional help at any point, CA For NRI — Zenify Consultancy Services specialises exclusively in NRI taxation and cross-border financial compliance. 

Financial Year vs Assessment Year

Does the New Income Tax Act 2025 Affect Your AY 2026–27 Return? 

The Income Tax Act 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961. However, the new Act does NOT govern your AY 2026–27 return. Income earned during FY

2025–26 (ending 31 March 2026) is assessed under the old Income-tax Act, 1961. The new ‘Tax Year’ concept applies only from FY 2026–27 onwards. All ITR forms for AY 2026–27 follow the old Act. 

Your residential status under the Income Tax Act is determined each financial year based on the number of days you were physically present in India during FY 2025-26 (1 April 2025 to 31 March 2026), as well as the intention of coming to India or leaving India. This step must come before anything else. 

The Three Residential Status Categories

How to Determine NRI Status (Days Test) 

You qualify as an NRI for FY 2025-26 if: 

• Rule 1: You were in India for fewer than 182 days during FY 2025–26, OR • Rule 2: You were in India for fewer than 60 days in FY 2025–26 OR fewer than 365 days in total over the preceding 4 FYs 

Important exceptions to Rule 2: 

◦ For Indian citizens leaving India for employment purposes or as crew on Indian ships: the 60-day threshold is relaxed to 182 days 

◦ For Indian citizens or PIO/OCI already settled outside India coming to visit India, with India-sourced income > ₹15 lakh: the 60-day threshold raised to 120 days 

The Deemed Resident Rule (Section 6(1A))

As an NRI, only the following income is subject to Indian income tax. Your foreign income is completely outside the scope of Indian taxation (unless you qualify as a Deemed Resident).

For a detailed breakdown, read: How to Calculate Total Income from Indian Sources for NRIs

NRIs use the same slab rates as resident individuals, but with two critical differences: NRIs cannot claim the Section 87A rebate, and cannot benefit from the higher basic exemption available to senior/super-senior citizen residents. 

New Tax Regime Slabs (Default — Applies Unless Old Regime is Chosen)

Old Tax Regime Slabs (Optional — Choose If You Have Large Deductions)

Which Tax Regime Should an NRI Choose?

Always calculate your tax liability under both regimes before filing. The difference can be ₹20,000 to ₹1 lakh or more.

Capital gains rules for NRIs were significantly updated in Budget 2024 and continue to apply in FY 2025-26. The date of sale (before or after 23 July 2024) matters for assets sold in the current year.

Capital Gains Tax Rate Table

TDS on Capital Gains for NRIs

NRIs can claim several deductions under the Income Tax Act, subject to regime choice.

Deductions Under Old Tax Regime (Chapter VI-A)

Deductions Allowed in New Tax Regime

• India has Double Taxation Avoidance Agreements (DTAA) with 90+ countries, including the UAE, USA, UK, Canada, Australia, Singapore, Germany, and the Netherlands. DTAA ensures that NRIs do not pay tax twice on the same income. To claim DTAA benefits:Tax Exemption / Reduced TDS Method (TRC + Form 10F) 

  Claim the applicable DTAA rate at the time of payment by: 

  • Obtaining a Tax Residency Certificate (TRC) from your country of residence. ● Filing Form 10F electronically on the Income Tax portal (where applicable). ● Submitting the TRC and Form 10F to the Indian payer (bank, tenant, buyer, etc.) before TDS is deducted. 

  Tax Credit Method (Form 67) 

  If tax is payable in both India and your country of residence, you can claim Foreign Tax Credit (FTC) by: 

  • Filing Form 67 before or along with your ITR (as prescribed). 
  • Claiming the tax credit in your Income Tax Return to avoid double taxation. 

DTAA Rates (When Claiming Relief with TRC)

• Organise all documents under these categories before starting your ITR filing. Review and check off only the items applicable to your income situation. Identity & KYC Documents 
  • PAN Card (Mandatory) 
  • Aadhaar Card (Optional for NRIs; useful for e-verification if linked to Indian mobile) • ☐ Passport — front page + all pages with India entry/exit stamps (for day-count and residency status) 
  • Valid Visa / OCI Card / Overseas residency proof 
  • Overseas address for portal update

  Income Tax Portal Access 

  • Login to incometax.gov.in (PAN is your user ID) 
  • Reset password if forgotten (via OTP or email) 
  • Update mobile number and email linked to your PAN profile 
  • Download Form 26AS (TDS credit statement) 
  • Download AIS (Annual Information Statement) and TIS (Taxpayer Information Summary) 

  �� Always cross-check Form 26AS and AIS before filing. Mismatches between your documents and pre-filled portal data are the #1 cause of income tax notices for NRIs.

  Bank Account Statements (01 Apr 2025 to 31 Mar 2026) 

  • NRO Account Statement — full year (interest is taxable; TDS likely deducted at 30%) •  NRE Account Statement (Optional; interest is exempt but useful for reconciliation) • FCNR Account Statement (Optional; generally exempt) 
  • ☐ Indian savings bank account statements (if applicable) 
  • ☐ Interest certificates / Form 16A from banks for TDS on NRO interest. Understanding your accounts: NRE/NRO Bank Account — Tax and FEMA Implications

  Salary & Employment Income (India-Sourced) 

  • Form 16 — Part A (TDS deducted) and Part B (salary breakdown) • ☐ Monthly payslips 
  • Appointment letter/employment contract from Indian employer 
  • Any arrears, gratuity, or ex gratia paid during the year 

  Rental Income from Indian Property 

  • Rental agreement(s) with tenant name, PAN, address, rent amount • ☐ Month-wise rent receipts 
  • Full property address with PIN code 
  • Municipal tax payment receipts 
  • Housing loan interest certificate (for deduction under Section 24) 
  • Co-ownership percentage if property is jointly held 

  Capital Gains Documents 

  • Capital Gains / Realised Gains Statement from CAMS, KFintech, Zerodha, ICICI Direct, etc. 
  • Profit & Loss statement from stock broker(s) 
  • PMS portfolio statement and CA-certified report (if applicable) 
  • For property sale: Sale deed, purchase deed, registration documents, stamp duty paid
  • Fair Market Value (FMV) report from a registered valuer (if property bought before 1 April 2001) 
  • Reinvestment proof under Section 54 (new residential property) or Section 54EC (NHAI/REC bonds) for exemption 
  • Form 16A (TDS certificate from buyer if property sold) 
  • Lower TDS Certificate under Section 197 / Form 13 (if applied) 

  Other Income Documents 

  • Dividend report 
  • Fixed deposit and recurring deposit interest certificates 
  • Annuity/pension/royalty income details 
  • Any lottery/horse race/gaming winnings (taxable at flat 30%) 

  Deduction & Investment Proofs (Old Regime Filers) 

  • LIC / ULIP / life insurance premium receipts (Section 80C) 
  • ELSS / PPF / NSC / FD investment receipts (Section 80C) 
  • Health insurance premium receipts (Section 80D) 
  • Education loan interest certificate (Section 80E) 
  • Donation receipts with valid 80G registration numbers 
  • Home loan interest certificate (Section 24) 

  Residential Status & Day-Count Documents 

  • Day-by-day record of time spent in India during FY 2025–26 
  • Passport copies showing all India entry/exit stamps 
  • Airline boarding passes or travel itinerary (as supporting evidence) • ☐ Day-count record for each of the preceding 4 financial years (for secondary test) 

  DTAA Documents (If Claiming Treaty Relief) 

  • Tax Residency Certificate (TRC) issued by the tax authority of the country of residence •  Form 10F — must be filed electronically on the Income Tax portal 
  • Foreign tax return/tax payment proof from the country of residence 
  • Declaration of beneficial ownership 

  Foreign Assets (Only If You Qualify as ROR) 

  • Foreign bank account details (bank name, account number, IBAN, country, peak balance in INR) 
  • Foreign property details (address, acquisition value, income earned) • ☐ Foreign equity investments (company, country, shares, cost, FMV) • ☐ Foreign pension / provident fund/retirement account details

1. Step 1: Confirm your residential status for FY 2025–26 with an exact day count in India 2. Step 2: Log in to incometax.gov.in — Go to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’ 
2. Step 3: Select Assessment Year — Choose AY 2026-27 (for income earned in FY 2025-26) 
3. Step 4: Select the correct ITR Form (ITR-2 for most NRIs) 
4. Step 5: Select Filing Mode — Online (portal pre-fills data from 26AS/AIS) or Offline (Excel utility download) 
5. Step 6: Select Residential Status — Choose ‘Non-Resident’ on the portal 7. Step 7: Choose Tax Regime — New regime is default; opt for Old Regime if beneficial (non-business NRIs can choose at filing; business NRIs must file Form 10-IEA first) 8. Step 8: Enter all income details — Salary, House Property, Capital Gains (split by date/asset type), Other Sources
6. Step 9: Reconcile TDS credits against Form 26AS; raise a grievance if any TDS credit is missing 
7. Step 10: Enter deductions applicable under the Old Regime (80C, 80D, 24(b), etc.) 11. Step 11: Claim DTAA relief — Fill Schedule FSI (foreign source income) and Schedule TR (tax relief) if applicable; (attach TRC + Form 10F) 
8. Step 12: Validate the return and check for errors; address any AIS/26AS mismatches before submission 
9. Step 13: Submit the return 
10. Step 14: E-verify within 30 days (mandatory; unverified returns are invalid) 

• Claim TDS Refunds: Banks deduct TDS on NRO interest at 30% flat. If your actual tax liability is lower (or nil), filing an ITR is the only way to claim that refund.
• Carry Forward Losses: Capital losses can be set off against capital gains in future years — but only if you file on time. 
• Visa and Loan Documentation: Many countries’ immigration authorities and Indian banks require the last 2–3 years of ITR filings. 
• Property Purchase / Investment in India: Increasingly required for KYC and compliance purposes. 
• Avoid Notices: If high-value transactions (property sale, large bank credits) appear in AIS and no ITR is filed, the tax department may issue a scrutiny notice. 
• FEMA Compliance: Repatriating money from India often requires proof of ITR filing and income/tax computation. 

• Claim TDS Refunds: Banks deduct TDS on NRO interest at 30% flat. If your actual tax liability is lower (or nil), filing an ITR is the only way to claim that refund.
• Carry Forward Losses: Capital losses can be set off against capital gains in future years — but only if you file on time. 
• Visa and Loan Documentation: Many countries’ immigration authorities and Indian banks require the last 2–3 years of ITR filings. 
• Property Purchase / Investment in India: Increasingly required for KYC and compliance purposes. 
• Avoid Notices: If high-value transactions (property sale, large bank credits) appear in AIS and no ITR is filed, the tax department may issue a scrutiny notice. 
• FEMA Compliance: Repatriating money from India often requires proof of ITR filing and income/tax computation. 

• CA For NRI — Zenify Consultancy Services is a specialised NRI tax practice serving clients across the UAE, USA, UK, Canada, Australia, Singapore, and more. We offer:
  • NRI Tax Filing Services — End-to-end ITR-2/ITR-3 filing including residency determination, income computation, DTAA claims, and e-verification 
  • Lower TDS Certificate — Form 13 application under Section 197 to avoid excess TDS deduction on property sales and NRO income 
  • Capital Gains Tax Advisory — Property, equity, and mutual fund capital gains computation and exemption planning 
  • Tax Residency Certificate (TRC) — Assistance in obtaining TRC for DTAA claims • FEMA Compliance — NRE/NRO account compliance, repatriation, and FEMA advisory • Repatriation of Sale Proceeds — Assistance in repatriating funds from property sale proceeds 
  • NRE/NRO Account Guidance — Opening, conversion, and compliance advisory for NRI bank accounts