Non-Resident Indians (NRIs) often assume they are exempt from filing taxes in India – but this is not always true.
The Income Tax Act, 1961, clearly outlines when an NRI is required to file a return in India, even if their income is earned abroad.
This blog explains who should file income tax returns as an NRI, key income thresholds, and scenarios that trigger compliance for FY 2024-25.
Legal Reference
- Section 139(1), Section 6, Income Tax Act, 1961
- CBDT Circulars on NRI taxation
- Schedule FA & Schedule TR – for foreign assets and tax relief reporting
Who Qualifies as an NRI?
You are considered a Non-Resident Indian (NRI) if you do not meet any of the following conditions in a financial year:
- Stayed in India for 182 days or more, OR
- Stayed for 60 days or more during the year and 365 days or more in the preceding 4 years
- For Indian citizens leaving India for employment or as crew of Indian ships, the 60-day condition is replaced with 182 days
Note: The definition is based on physical presence, not passport, citizenship, or NRE/NRO status.
Who Should File Income Tax in India as an NRI?
An NRI must file ITR in India for FY 2024-25 (AY 2025-26) if:
- Their Indian-sourced income exceeds ₹2.5 lakh (basic exemption limit)
- They earned capital gains in India – even short-term capital gains under Section 111A
- They sold property or shares in India
- They want to claim refund for TDS deducted on:
- Rent
- Interest from NRO account
- Capital gains
- Dividend income
- They have foreign bank accounts, assets, or holdings requiring Schedule FA disclosure
- They have brought funds into India, triggering potential scrutiny or assessment
Income Sources Taxable in India for NRIs
- Salary received in India
- Rental income from property in India
- Interest on NRO accounts or fixed deposits
- Capital gains on mutual funds, stocks, crypto, or real estate
- Dividend income from Indian companies
- Income from business or profession controlled from India
Example Scenarios
- Example 1: Raj, an NRI in Dubai, owns a flat in Mumbai earning ₹30,000/month in rent
- Total ₹3.6 lakh → ITR filing mandatory
- Example 2: Priya, a student in the US, earned ₹90,000 as interest from NRO FD
- TDS deducted at 30% → ITR filing recommended for refund claim
- Example 3: Arjun, a software engineer in Germany, sold mutual funds in India for a gain of ₹1.2 lakh
- Capital gains → ITR filing required
Documents Needed for NRI Tax Filing
- PAN card and Aadhaar (if applicable)
- Bank account details (India and abroad)
- TDS certificates (Form 16A)
- NRO/NRE bank statements
- Form 67 (for foreign tax credit) if claiming DTAA relief
- Property documents or capital gain statements
- Details of foreign assets for Schedule FA
Conclusion
Just being an NRI doesn’t exempt you from income tax compliance in India. If you have any Indian income or claimable TDS, you should file an ITR to stay compliant and avoid penalties.
Filing your return also protects your Indian assets and enables smooth repatriation of funds.
Call to Action
Are you an NRI earning rent, interest, or capital gains in India?
You may be required to file an ITR – even if you’re abroad. Avoid penalties and secure your refund.
Book a consultation with Anshul Goyal, Chartered Accountant, to ensure full NRI tax compliance.
https://calendly.com/anshulcpa
Disclaimer
This article is intended for informational purposes only. NRI tax obligations are subject to residential status, income type, DTAA treaties, and CBDT regulations.
Anshul Goyal is a Chartered Accountant licensed with ICAI, India.
Please seek professional advice for personalized tax filing and foreign income reporting.
Frequently Asked Questions
1. Is ITR filing mandatory for NRIs with only foreign income?
No, unless they have taxable Indian income or need to claim refunds.
2. Do NRIs need Aadhaar to file ITR?
Aadhaar is not mandatory for NRIs, but linking with PAN is recommended.
3. Can NRIs claim 80C deductions?
Yes, but only on eligible investments like life insurance, tuition, or EPF (if applicable).
4. What is the TDS rate for NRIs?
Varies: Rent (30%), Interest (30%), Capital gains (15%-20%), etc.
5. Can NRIs file ITR without Indian income?
Voluntarily, yes – especially for asset disclosure or to build a compliance record.