Question 1

Who is considered an NRI for income tax purposes?

Accepted Answer

Under the Income Tax Act, an individual is treated as a Non-Resident Indian (NRI) for a financial year if they do not satisfy either of the following conditions: They stayed in India for 182 days or more during the financial year, or They stayed in India for 60 days or more in the current financial year and 365 days or more in the four immediately preceding financial years If neither condition is met, the individual is classified as a Non-Resident for that financial year. Please note that the 60-day threshold increases to 120 days for Indian citizens whose total Indian income exceeds &#8377;15 lakh. For Indian citizens going abroad for employment or as crew members of Indian ships, only the 182-day rule applies.

Question 2

Is an NRI required to file an Income Tax Return in India?

Accepted Answer

An NRI is required to file an Income Tax Return in India if their taxable income in India exceeds the basic exemption limit: Financial Year Old Tax Regime New Tax Regime FY 2024-25 &#8377;2.5 lakh &#8377;3 lakh FY 2025-26 &#8377;2.5 lakh &#8377;4 lakh Important exception for capital gains: Unlike resident Indians, NRIs cannot offset capital gains against the basic exemption limit. If an NRI has any long-term or short-term capital gains in India, they are required to file an ITR regardless of whether the gains fall below the exemption limit. Even where filing is not mandatory, it is advisable to file an ITR to claim refunds of TDS deducted, carry forward losses, and maintain a clean compliance record.

Question 3

What income of an NRI is taxable in India?

Accepted Answer

An NRI is taxed in India only on income that is earned, received, or accrues in India. This includes: Salary for services rendered in India Rental income from property situated in India Capital gains from the sale of assets in India such as property, shares, and mutual funds Interest on NRO fixed deposits and savings accounts Dividends from Indian companies Income from business or profession carried out in India Income earned and received entirely outside India is not taxable in India. Interest on NRE and FCNR accounts is fully exempt from tax under Section 10(4) of the Income Tax Act.

Question 4

What is the tax treatment of self-occupied property for NRIs?

Accepted Answer

Under Section 23 of the Income Tax Act, the annual value of a self-occupied property is taken as nil, meaning no tax is payable on notional rent. This benefit applies to a maximum of two properties owned by the taxpayer, including NRIs. The Finance Act 2025, effective from FY 2025-26, has simplified the conditions for claiming a property as self-occupied. Previously, to claim a second property as self-occupied, the owner was required to prove they could not occupy it due to employment, business, or profession at another place - a condition that was often difficult for NRIs to satisfy. This condition has now been removed. From FY 2025-26 onwards, the annual value of any property occupied by the owner for their own residence, or which cannot be occupied for any reason, shall be taken as nil - without needing to establish the specific reason for non-occupation. The two property limit continues to apply. Any property beyond the two designated self-occupied properties that is not actually let out will continue to be treated as deemed to be let out and notional rent will be taxed accordingly.

Question 5

Which ITR form should an NRI use?

Accepted Answer

ITR Form When Applicable ITR-2 Income from salary, house property, capital gains, or other sources - most commonly used by NRIs ITR-3 Income from business or profession carried out in India ITR-1 and ITR-4 Not applicable to NRIs

Question 6

Can an NRI choose between the old and new tax regimes?

Accepted Answer

Yes. From FY 2024-25, the new tax regime is the default for all taxpayers including NRIs. NRIs have the option to opt out of the new regime and file under the old tax regime. The key differences are: New tax regime - lower slab rates but most deductions and exemptions are not available Old tax regime - higher slab rates but allows deductions under Section 80C, 80D, 80E, 80G, and interest on housing loan under Section 24(b) For NRIs with significant eligible deductions, the old regime may result in lower tax. NRIs should calculate their liability under both regimes before deciding. For non-business income, the regime can be changed every year directly in the ITR. For NRIs with business income, Form 10-IEA must be filed within the due date to opt out of the new regime. Important: The rebate under Section 87A is not available to NRIs under either regime. It is available only to resident individuals.

Question 7

Is an NRI required to pay advance tax?

Accepted Answer

Yes. If an NRI's estimated tax liability for the financial year exceeds &#8377;10,000, they are required to pay advance tax in instalments during the year. Failure to pay advance tax or short payment attracts interest under Section 234B and Section 234C of the Income Tax Act.

Question 8

Can an NRI claim DTAA benefits while filing in India?

Accepted Answer

Yes. India has Double Taxation Avoidance Agreements (DTAAs) with over 90 countries. If the same income is taxed in both India and the NRI's country of residence, the NRI can claim relief under the applicable DTAA. To claim DTAA benefits the NRI must: Obtain a Tax Residency Certificate (TRC) from the foreign tax authority File Form 10F with the Income Tax Department Declare the foreign income and DTAA relief correctly in the ITR

Question 9

Does an NRI need to be physically present in India to file an ITR?

Accepted Answer

No. The entire ITR filing process can be completed online through the Income Tax e-filing portal from anywhere in the world. E-verification can be done using Aadhaar OTP, net banking, or a Digital Signature Certificate. Physical presence in India is not required at any stage of the process.

Question 10

What are the consequences of not filing an ITR or misreporting residential status?

Accepted Answer

Failure to file an ITR when required, or incorrectly declaring residential status, can result in: Late filing fee of up to &#8377;10,000 under Section 234F Interest on outstanding tax under Section 234A Reopening of assessments under Section 147 Penalties ranging from 50% to 200% of the tax due for misreporting or under-reporting income under Section 270A In serious cases, prosecution for tax evasion under Section 276B and Section 276C

Question 11

What documents does an NRI need to file their ITR?

Accepted Answer

The following documents should be kept ready before filing: PAN card Passport and travel record showing days spent in India during the financial year Form 26AS and AIS downloaded from the Income Tax e-filing portal Salary slips and Form 16 if applicable NRO and NRE account statements Property documents and rental income details if applicable Capital gains statements from brokers or mutual fund houses Tax Residency Certificate (TRC) and Form 10F if claiming DTAA relief Proof of deductions claimed under Section 80C, 80D, 80E, and 80G

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Hassle-Free NRI Tax Return Filing in India

How It Works

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Expert Preparation

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Transparent Pricing for NRIs

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Why NRIs Choose Us

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Important Considerations for NRI Income Tax Filing

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Frequently Asked Questions

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