How NRIs Can File ITR in India and Claim TDS Refund: Step-by-Step Guide (FY 2025-26)

For Non-Resident Indians (NRIs), filing an Income Tax Return (ITR) in India may not seem like a top priority—especially if you believe your income is already taxed at source. However, many NRIs face TDS (Tax Deducted at Source) even when their income is below the taxable limit or eligible for exemptions. This blog explains the step-by-step process for NRIs to file ITR and claim a TDS refund in India.

Even if you live and work abroad, filing ITR in India may be necessary if:

• You have taxable income in India (e.g., rent, capital gains, interest)
• You want to claim TDS refund
• You need to carry forward capital losses
• You’re applying for a lower TDS certificate or home loan in India

TDS is often deducted at flat rates for NRIs—leading to excessive tax deductions even when the actual tax liability is lower.

As per Section 6 of the Income Tax Act:

You are considered an NRI if you stay less than 182 days in India during a financial year and less than 365 days over the previous four years combined.

Your residential status plays a crucial role in determining taxability and eligibility for deductions.

As an NRI, you’re liable to pay tax only on income earned or received in India, such as:

• Rent from property located in India
• Capital gains from sale of property or shares
• Interest on NRO account
• Dividend income from Indian companies
  

TDS is deducted at special rates for NRIs:

• 20% on long-term capital gains (plus surcharge and cess)
• 30% on short-term gains, rent, or interest
• 10% on dividends (if applicable)

Even if your total income is below the exemption limit, TDS is deducted at source—making it essential to file ITR to claim a refund.

TDS is often deducted upfront without considering deductions, exemptions, or lower tax brackets. You may be eligible for a refund if:

• Your actual tax liability is lower than TDS deducted
• You’ve reinvested capital gains under Sections 54, 54EC, etc.
• You have no taxable income but TDS is still deducted

Filing an ITR is the only way to claim this excess amount back.

1. Get a PAN (Permanent Account Number)

PAN is mandatory for all ITR filings. If you don’t have one, apply online.

2. Link PAN with Aadhaar or Provide Passport

If you don’t have Aadhaar, you may be exempt but might need to submit passport details.

3. Choose the Correct ITR Form

• Most NRIs use ITR-2
• If you have business income in India, use ITR-3

4. Collect Income & Tax Documents

• Form 16A (TDS certificate)
• Form 26AS (TDS summary)
• Sale deeds, rental agreements, and bank interest certificates

5. Disclose Foreign Assets (if applicable)

Mandatory for NRIs who qualify as Resident but Not Ordinarily Resident (RNOR) or Resident.

6. File Return on Income Tax Portal

Visit https://incometax.gov.in and upload the return.

7. Verify the Return

Via Aadhaar OTP (if applicable), NetBanking, or by sending signed ITR-V to CPC Bengaluru.

• Cross-check TDS entries in Form 26AS
• Enter the TDS details in your ITR under ‘Tax Details’ tab
• Once return is processed, refund will be issued to your NRO bank account
  

• Apply for Form 13 to get a Lower/Nil TDS Certificate
• Use the DTAA (Double Taxation Avoidance Agreement) benefits by submitting TRC + Form 10F
• Prefer NRE accounts (interest is tax-free)
• File your return before the deadline to avoid late fees and refund delays
  

• ITR Filing Deadline: 31st July 2025 (for FY 2024–25)
• Late Filing Penalty: ₹1,000 to ₹5,000
• TDS refund may take 2–6 months post filing

• PAN card
• Passport (for proof of residential status)
• Form 16A / Form 26AS
• Property sale deed, rent agreements, interest statements
• Bank account details (preferably NRO for refund)

Filing your ITR in India as an NRI is more than just a legal obligation—it’s your way to reclaim excess TDS and ensure full compliance with Indian tax laws. With the right documents, forms, and procedures, you can:

• File your ITR smoothly
• Avoid double taxation
• Claim refunds you rightfully deserve

Pro tip: Always consult a tax expert familiar with NRI taxation for personalized advice.