Important Year-End Compliance Reminders for NRIs: Advance Tax and Belated or Revised ITR Filing

As we move into the final month of the year, it is important for Non-Resident Indians to reassess their Indian tax obligations and ensure timely compliance. December is a crucial period for two key requirements: payment of the third instalment of advance tax and filing of any pending belated or revised Income Tax Returns. Ensuring these obligations are met not only avoids penalties and interest but also maintains a strong compliance history for future assessments.

Under the Income-tax Act, every taxpayer, including NRIs, must pay advance tax if their total tax liability for the financial year exceeds ₹10,000 after considering TDS or TCS already deducted. This mechanism ensures that taxes are paid during the year in which income is earned rather than at the end of the year. For NRIs, this becomes particularly relevant when they earn income on which full TDS is not deducted or where tax is payable on a self-assessment basis.

The advance tax schedule for individuals requires cumulative payments as follows:

15 June – at least 15% of the estimated total tax liability
15 September – at least 45% of the estimated total tax liability
15 December – at least 75% of the estimated total tax liability
15 March – 100% of the estimated total tax liability

NRIs often have income streams such as rental income, interest from NRO deposits, capital gains from the sale of shares or property, or business or professional income sourced in India. In many cases, TDS may not fully cover the entire tax liability. It is therefore advisable to compute the year-to-date income accurately and deposit the advance tax shortfall by 15 December 2025. Failure to do so may lead to interest charges under sections 234B and 234C, which can substantially increase the overall tax outflow.

For NRIs who have not yet filed their Income Tax Returns for FY 2024–25 (AY 2025–26), the last opportunity to file a belated return is 31 December 2025. Filing after the due date attracts a late fee under section 234F and may result in the loss of certain tax benefits. A belated return is still considered a valid return, but the opportunity to correct errors or carry forward certain losses is limited. In cases where an NRI has already filed the return but later discovers errors such as omission of income, incorrect reporting of residential status, missing foreign assets or bank accounts, or incorrect capital gains computation, a revised return can be filed. The revised return for FY 2024–25 can also be filed only up to 31 December 2025. After this date, corrections cannot be made except through the limited and more technical process of updated returns under section 139(8A), which may not always be beneficial and generally results in a higher tax cost.

Missing the deadline may have several adverse consequences. Refunds may get delayed or denied. Losses such as capital losses or business losses may not be allowed to be carried forward. Additionally, maintaining a consistent compliance history is important for NRIs, as irregularities in filing can affect future scrutiny or interactions with tax authorities.

NRIs often deal with diverse and complex income sources, cross-border tax implications, DTAA considerations, foreign asset reporting, and tax residency issues. A structured and timely approach to advance tax and return filing helps prevent avoidable errors and penalties. At Zenify Consultancy Services, we specialise in NRI taxation and provide dedicated assistance with advance tax workings for FY 2025–26, belated or revised ITR filing for FY 2024–25, and guidance on capital gains, rental income, DTAA benefits, and compliance procedures. NRIs who require support or clarification can reach out to us for professional assistance to ensure a smooth and compliant year-end tax closure.