Do NRIs need to file an income tax return in India? Thresholds, refunds, forms and due dates
In short
- An NRI must file if Indian income exceeds Rs 2.5 lakh under the old regime or Rs 4 lakh under the new regime for FY 2025-26.
- For FY 2025-26 income, the ITR-2 due date was 31 July 2026; a belated return can still be filed until 31 December 2026.
- NRIs cannot use ITR-1 and cannot claim the Section 87A rebate, which is limited to residents.
- The only way to recover excess TDS, such as tax deducted on a full property sale price, is to file a return.
An NRI must file an Indian income tax return when Indian income for the year exceeds the basic exemption limit. For FY 2025-26, that limit is Rs 4 lakh under the default new regime and Rs 2.5 lakh under the old regime. Even below the limit, filing is often worth it, because a return is the only way to get back excess TDS.
Only Indian income counts for a non-resident. Your salary in Toronto or Sydney does not enter the Indian return. Rent, NRO interest, capital gains on Indian assets and Indian dividends do.
Which law and which year
Income earned from 1 April 2025 to 31 March 2026 is FY 2025-26. Its return is for assessment year (AY) 2026-27 and is governed by the Income-tax Act, 1961.
From 1 April 2026, the Income-tax Act, 2025 applies, with a single “tax year” in place of FY and AY. Your first return under it covers tax year 2026-27 and will be filed in 2027. The filing provisions moved from Section 139 to Section 263, and the department says the categories of people who must file are broadly the same.
When filing is mandatory
Income above the basic exemption limit
The test uses your gross total income before certain deductions and exemptions.
| Regime (FY 2025-26) | Basic exemption for a non-resident | Applies by default? |
|---|---|---|
| New regime | Rs 4 lakh | Yes |
| Old regime | Rs 2.5 lakh, at any age | Only if you opt in |
Under the old regime, residents aged 60 or more get a higher exemption of Rs 3 lakh. Residents aged 80 or more get Rs 5 lakh. Non-residents do not. An NRI aged 70 still has a Rs 2.5 lakh limit under the old regime.
Other triggers, even below the limit
The department lists further situations that require a return, whatever your income. The main ones are:
- deposits of more than Rs 1 crore in one or more current accounts in the year;
- spending of more than Rs 2 lakh on foreign travel for yourself or anyone else;
- electricity bills of more than Rs 1 lakh;
- total TDS and TCS of Rs 25,000 or more;
- savings bank deposits of Rs 50 lakh or more in total.
The TDS trigger catches many NRIs. TDS on NRO interest or a property sale can easily cross Rs 25,000.
The NRI exemption from filing (old Section 115G)
There is one narrow exemption. Under Section 115G of the 1961 Act, now Section 216 of the 2025 Act, an NRI need not file if two conditions hold:
- total income consists only of investment income, long-term capital gains, or both, from “foreign exchange assets”; and
- tax was deducted at source on that income.
Foreign exchange assets are specific assets bought with convertible foreign exchange. They include shares of an Indian company and debentures or deposits of an Indian public company. Central government securities also qualify.
This is not a general “TDS is enough” rule. Rent, property sale gains and most mutual fund income are outside it. The exemption also does not help if excess TDS was deducted, because you need a return to claim the refund.
Why filing pays: TDS refunds
TDS on payments to NRIs is often higher than the final tax. Two cases are common.
Property sales. Without a lower-deduction certificate, buyers usually deduct TDS on the full sale price, not just the gain. The final tax is on the gain only.
NRO interest. Banks deduct TDS at 30% plus cess. If your total Indian income is small, the slab tax is far lower.
The refund is paid only after you file a return and the department processes it. Refunds go to a bank account pre-validated on the e-filing portal, and an NRO account can be validated for this. A non-resident with no Indian account can usually give foreign bank details in ITR-2 instead.
Worked example: refund after a property sale
Vikram lives in Melbourne. In November 2025 he sold a flat in Hyderabad bought in 2016.
- Sale price: Rs 48 lakh
- Purchase cost: Rs 30 lakh
- Long-term capital gain: Rs 18 lakh
- NRO interest in FY 2025-26: Rs 1 lakh
He had no lower-deduction certificate. The buyer deducted 12.5% plus 4% cess on Rs 48 lakh. The bank deducted 30% plus cess on the interest.
| Item | TDS deducted | Actual tax |
|---|---|---|
| Capital gain (12.5% plus cess on Rs 18 lakh) | Rs 6,24,000 | Rs 2,34,000 |
| NRO interest (Rs 1 lakh, under new regime slabs) | Rs 31,200 | Nil |
| Total | Rs 6,55,200 | Rs 2,34,000 |
His refund due is about Rs 4.21 lakh. The interest is taxed at slab rates and falls within the Rs 4 lakh nil band. The gain is taxed at a flat 12.5%.
Two NRI-specific points shape this result. A resident could set the unused basic exemption against the gain; a non-resident cannot. And Vikram cannot claim the Section 87A rebate.
He missed the 31 July 2026 due date. He can still file a belated return for AY 2026-27 by 31 December 2026 and claim the refund. A late fee will apply.
Which ITR form
| Situation | Form |
|---|---|
| Salary, rent, interest, capital gains, other income; no business | ITR-2 |
| Business or professional income in India | ITR-3 |
| ITR-1 (Sahaj) | Not available to NRIs |
The department’s form guidance limits ITR-1 to resident individuals other than those not ordinarily resident. Most NRIs file ITR-2. It also has the schedules for capital gains and for treaty relief claims.
Due dates for AY 2026-27 (income of FY 2025-26)
Budget 2026 brought in staggered due dates.
| Return | Due date |
|---|---|
| ITR-1 and ITR-2 | 31 July 2026 |
| ITR-3 and ITR-4, no audit | 31 August 2026 |
| Cases requiring a tax audit | 21 November 2026 (extended from 31 October) |
| Belated return | 31 December 2026 |
| Revised return | 31 March 2027 as proposed in Budget 2026, with a fee after 31 December 2026 (confirm on the income tax portal) |
The late fee under Section 234F of the 1961 Act is Rs 1,000 if total income is up to Rs 5 lakh. Otherwise it is Rs 5,000. Interest under Section 234A also runs at 1% a month on unpaid tax.
New regime or old regime
The new regime is the default from FY 2025-26. Its slabs for that year are:
| Income | Rate |
|---|---|
| Up to Rs 4 lakh | Nil |
| Rs 4 lakh to Rs 8 lakh | 5% |
| Rs 8 lakh to Rs 12 lakh | 10% |
| Rs 12 lakh to Rs 16 lakh | 15% |
| Rs 16 lakh to Rs 20 lakh | 20% |
| Rs 20 lakh to Rs 24 lakh | 25% |
| Above Rs 24 lakh | 30% |
The old regime allows deductions such as Section 80C and home loan interest. Those are rarely large for NRIs, so the new regime usually wins.
If you have no business income, you choose the regime in each year’s return. The law requires the old-regime option to be made in a return filed by the original due date. A belated return is therefore generally taxed under the new regime.
No Section 87A rebate for NRIs
Residents with income up to Rs 12 lakh pay no tax under the new regime, thanks to a rebate of up to Rs 60,000. The rebate is in Section 87A of the 1961 Act, carried into Section 156 of the 2025 Act. It is available only to an individual resident in India.
So an NRI with Rs 6 lakh of Indian slab income pays Rs 10,000 tax plus cess under the new regime. A resident with the same income pays nothing.
Common mistakes
- Not filing because “TDS was already deducted”. TDS is often higher than the tax, and only a return recovers it.
- Using ITR-1. It is for residents only, and a return on the wrong form may be treated as defective.
- Claiming the 87A rebate. It will be disallowed for a non-resident.
- Assuming the senior citizen exemption applies. The higher old-regime limits are for residents only.
- Wrong residential status in the return. Work out your status first. It decides what you report.
- Not validating a bank account. Refunds fail without a pre-validated Indian account, or correct foreign bank details if you have no Indian account.
- Ignoring the treaty. If your country of residence also taxes the income, claim relief properly in both returns.
If your return involves a large property gain, a treaty claim or an earlier-year notice, have a chartered accountant review it.
What to do next
- Confirm your status first with the residential status calculator.
- Estimate the tax and likely refund on a sale with the property sale tax calculator.
- Cut TDS before the next sale with a lower TDS certificate on Form 128.
- Read the full picture in NRI property sale: TDS and capital gains and capital gains exemptions under Sections 54, 54EC and 54F.
- Claiming treaty relief? Use the DTAA finder and read DTAA benefits, TRC and Form 10F.
- For the new law and form numbers, see what the Income-tax Act, 2025 changes for NRIs.
Sources
- Income Tax Department: Income tax returns FAQ (AY 2026-27)
- Income Tax Department: Which ITR form applies (AY 2026-27)
- Income Tax Department: Tax rates for individuals
- Income Tax Department: Section 87A, Income-tax Act, 1961
- Income Tax Department: Do I need to file a return when taxes are paid?
- Income Tax Department: Non-resident FAQs (1961 and 2025 Acts compared)
- Business Today: July 31 ITR deadline for FY 2025-26
- Studycafe: CBDT extends ITR and tax audit due dates for AY 2026-27
This guide explains the rules as they stood on 25 October 2026. It is general information, not tax, legal or financial advice. Rules change, and individual cases have exceptions, so confirm your position with a chartered accountant before acting. Spotted an error? Tell us and we will correct it.