How to File Income Tax Returns for NRI in Simple Steps

Filing taxes in India can be confusing — especially if you're a Non-Resident Indian (NRI) managing income in both India and abroad.

Whether you need to file ITR in India as an NRI, what income is taxable, and the documents you will need, this guide will help you with a step-by-step filing process — all from an NRI’s perspective.

As an NRI, Do I Need to File Income Tax Return (ITR) in India?

All NRIs are advised to file an ITR in India if they have taxable income exceeding basic exemption limit or if they seek to claim refund for excess tax deduction. However, as per the Income-tax Act, 1961, filing of ITR is mandatory for NRIs, if any of the following conditions are met:

1. Income Threshold Exceeds Basic Exemption Limit:

If the total taxable income^* in India during the relevant financial year (1^st April – 31^st March) exceeds the basic exemption limit:

₹2,50,000 under the old tax regime, or

₹4,00,000 under the new (default) tax regime.

2. Specific Transactions or Criteria Trigger Mandatory Filing:

Even if your taxable income in India is below the basic exemption limit, ITR filing is still mandatory, if any of the following conditions apply during the relevant financial year:

Short-Term Capital Gains (STCG) on equity shares, equity-oriented mutual fund units, or units of a business trust.
Long-Term Capital Gains (LTCG) that are chargeable to tax in India.
Deposited over ₹1 crore in one or more current accounts maintained with a bank or co-operative bank.
Incurred foreign travel expenses exceeding ₹2 lakhs for yourself or someone else.
Electricity expenses exceeded ₹1 lakh during the year.
Total sales, turnover or gross receipts in business exceeded ₹60 lakhs.
Total gross receipt of profession exceeded ₹10 lakhs.
Total tax deducted (TDS) and tax collected (TCS) during the year was ₹25,000 or more.
Deposited ₹50 lakhs or more in savings account in India.

Filing an Income Tax Return (ITR) isn’t mandatory for NRIs if they don’t fall in any of the above categories. However, filing ITR offers several benefits:

Support visa applications/renewal, credit worthiness, and financial documentation.
Claim tax refunds and TDS credits in India.
Claim Foreign Tax Credit (FTC) in country of residence as per the applicable tax laws.
Carry forward capital losses to offset against future gains.
Maintain a clean and consistent tax record to avoid prospective notices from the IT Department.
Ensure proper documentation for future financial needs in India or abroad.

Note: Even if your income is exempt under the Double Taxation Avoidance Agreement (DTAA), you may still be required to file an Income Tax Return (ITR) to claim the benefits available under the DTAA.

^*Taxable income for the purpose of filing ITR means gross total income before giving effect to exemption on re-investment of capital gains and Chapter VI-A deductions i.e. donations, investment life insurance policy/ Unit Linked Insurance Policy/ Equity Linked Savings Scheme, Mediclaim etc.

As an NRI, What All Is Taxable in India?

As per Indian tax laws, only Indian income received or accrued in India is taxable for NRIs.

Here’s what that includes:

Type of Income	Taxable in India?
Salary received in India or for services rendered in India	✅ Yes
Rental income from property in India	✅ Yes
Business or professional income accrued or arisen in India	✅ Yes
Capital gains from sale of assets in India (e.g., shares, property)	✅ Yes
Dividend from shares and investments in India	✅ Yes
Interest on NRO bank account, loans, other investments	✅ Yes
Interest on NRE/FCNR accounts	❌ No (Exempt)
Foreign income (e.g., job abroad, foreign investments)	❌ No

Things to Keep in Mind While Filing Tax Return in India (Documents Required)

Before you start filing your return, keep these key documents handy:

Essential Documents/ Information:

PAN Card – Mandatory for filing ITR in India.
Passport – To help determine and establish NRI residential status (including travel details, if required).
Form 26AS and AIS (Annual Information Statement) – To review tax credits and financial transactions reported to the Income Tax Department.
Bank Account Statements – Especially from NRO and NRE accounts for income earned or interest received in India.
Property-related Documents – Ownership papers, rent receipts, and loan interest certificates for income or deductions related to house property.
Capital Gains Statements – From brokers, depositories, or mutual fund AMCs for sale of securities or other capital assets.
DTAA-related Documents:
- Tax Residency Certificate (TRC)
- Form 10F
TDS Certificates (Form 16A) – For any tax deducted at source on income like rent, interest, or professional fees.
Investment Proofs – To claim deductions under sections like 80C, 80D, etc. (if applicable).
Login Credentials for Income Tax e-Filing Portal – For accessing and submitting your return online.

Step-by-Step Guide to File Your Taxes in India as an NRI

Step 1: Know Your Residential Status

Determine your residential status under the Income Tax Act based on the number of days you have stayed in India in a financial year.

Step 2: Calculate Your Taxable Income & Liability

Compute your total taxable income accrued and/or received in India, including:

Salary
Rental income
Capital gains
Dividend Income
Interest on NRO accounts and other investments
Any other sources

Note: Interest from NRE and FCNR accounts is exempt from tax, but must still be reported under the 'Exempt Income' schedule in your ITR.

From F.Y. 2023–24 onwards, the New Tax Regime is the default tax regime. It offers wider tax slabs and lower tax rates compared to the Old Regime. However, taxpayers opting for the New Regime cannot claim most deductions, such as:

Life insurance premiums, tuition fees, ELSS investments under Section 80C
Health insurance premiums under Section 80D
Donations under Section 80G etc.

One can still opt for the Old Regime if they wish to claim these benefits, by selecting it while filing their ITR. Ideally, one should compare their tax liability under both the Old and New Tax Regimes and choose the one that offers lower tax liability based on their income and eligible deductions.

Step 3: Claim DTAA Benefits (If Applicable)

If you're eligible, claim relief under the Double Taxation Avoidance Agreement (DTAA) by submitting required documents like the TRC and Form 10F to avoid double taxation on the same income.

For more details kindly refer our article on “Double Taxation Avoidance Agreement (DTAA): How NRIs Can Save on Taxes”

It is recommended to consult a tax expert to assess your eligibility for DTAA benefits and to ensure they are accurately claimed in your Income Tax Return (ITR).

Step 4: Choose & File the Appropriate ITR Form

For most NRIs, these are the relevant ITR forms:

Sr. No.	Type of Income	ITR applicable
1	If you have income from salary, house property, capital gains, or other sources (no business income)	ITR - 2
2	If you have business or professional income in India (along with any income mentioned in point 1)	ITR - 3

To file the ITR, use the Income Tax e-filing portal: https://www.incometax.gov.in

Step 5: Provide Indian Bank Account Details

You must report all Indian bank accounts held at any time during the financial year, except for dormant accounts (Accounts not operational for over 2 years as per RBI guidelines).
For income tax refunds, you should provide only an NRO (Non-Resident Ordinary) account. Refunds cannot be credited to NRE (Non-Resident External) bank accounts, and providing the wrong account may lead to delays or non-credit of the refund.
Ensure that the IFSC code and account number are accurate to avoid processing issues.
It is mandatory to pre-validate the selected bank account on the Income Tax e-Filing portal, as refunds are issued only to pre-validated and EVC-enabled accounts.

Note: Non-residents, who do not have a bank account in India and are claiming income-tax refund, have an option to furnish the details of foreign bank account in the ITR for issuance of refund.

Step 6: Verify Your ITR

Your ITR filing is incomplete without verification. You can verify by:

e-Verification (most preferred) using:
- Aadhaar OTP (only if you have Aadhaar)
- Net banking
- Demat account
- Using your Digital Signature Certificate (if you have one)
- Bank Electronic Verification Code (EVC)

Physical verification (if e-verification is not possible):
- Print, sign, and send ITR-V to CPC, Bengaluru within 30 days of filing of ITR.

Conclusion

Filing your Income Tax Return (ITR) in India as an NRI may seem complex, but with the right documentation and understanding of applicable provisions — especially under the Double Taxation Avoidance Agreement (DTAA) — the process becomes much more manageable. Timely and accurate filing not only ensures compliance with Indian tax laws but also helps you claim eligible deductions, refunds, and tax reliefs. It is advisable to stay updated with current regulations and seek professional guidance where necessary, to avoid errors and make the most of available tax benefits.