ITR Filing for NRI 2026 — Residential Status, Taxable Income, DTAA Benefits

NRIs (Non-Resident Indians) have specific tax obligations in India. Understanding your residential status and what income is taxable in India is the first step. Here is the complete guide for FY 2025-26.

Determining Residential Status

Your tax liability in India depends on your residential status for the financial year.

Resident (R)

You are a resident if you satisfy either of these conditions:

1. You were in India for 182 days or more during the financial year
2. You were in India for 60 days or more during the financial year AND 365 days or more during the preceding 4 years

Exception: Indian citizens and PIOs going abroad for employment are resident only if they are in India for 182+ days (the 60-day rule does not apply).

Non-Resident (NRI)

You are an NRI if you do not satisfy either condition above.

Resident but Not Ordinarily Resident (RNOR)

You are RNOR if you are a resident but:

• You were an NRI in 9 out of the preceding 10 years, OR
• You were in India for 729 days or less in the preceding 7 years

RNOR status is typically applicable to returning NRIs for 2-3 years.

What Income is Taxable for NRIs?

NRI — Only Indian-Sourced Income is Taxable

RNOR — Indian Income + Foreign Income from Indian Business

RNOR taxpayers are taxed on:

• All income earned or received in India
• Income from a business controlled from India

Foreign income (salary, investments abroad) is NOT taxable for RNOR.

Resident — Global Income is Taxable

Residents are taxed on their worldwide income.

TDS on NRI Income

Higher TDS rates apply to NRI income:

DTAA benefit: If India has a Double Taxation Avoidance Agreement (DTAA) with your country of residence, TDS may be deducted at a lower rate. Submit Form 10F and a Tax Residency Certificate (TRC) from your country to claim DTAA benefit.

DTAA — Double Taxation Avoidance Agreement

India has DTAAs with 90+ countries including USA, UK, UAE, Canada, Australia, Singapore, and Germany.

DTAA benefits:

• Lower TDS rates on specific income types
• Credit for taxes paid in India against taxes in your country of residence
• Exemption from double taxation

How to claim DTAA benefit:

1. Obtain a Tax Residency Certificate (TRC) from your country of residence
2. Fill Form 10F on the Indian IT portal
3. Submit to the Indian payer (bank, tenant, etc.) before they deduct TDS

Which ITR Form for NRIs?

NRIs cannot file ITR-1 (Sahaj) — they must use ITR-2 or ITR-3.

NRI Bank Accounts

On returning to India: NRE and FCNR accounts must be converted to resident accounts within a reasonable time. Interest earned after becoming a resident is taxable.

Filing ITR as an NRI

1. Determine residential status for FY 2025-26
2. Identify Indian-sourced income (rental, interest, capital gains)
3. Collect TDS certificates (Form 16A from banks, Form 26AS)
4. Claim DTAA benefit if applicable
5. File ITR-2 by July 31, 2026

E-verification: NRIs can e-verify using:

• Net banking (if you have an Indian bank account)
• Aadhaar OTP (if Aadhaar is linked to Indian mobile)
• Physical ITR-V sent to CPC Bengaluru

Frequently Asked Questions

Do NRIs need to file ITR in India?

NRIs must file ITR if their Indian income exceeds the basic exemption limit (₹2.5L for old regime, ₹3L for new regime). Even if no tax is payable (due to TDS), filing is recommended to claim refunds.

Is NRE account interest taxable?

No. Interest on NRE accounts is fully exempt from Indian income tax. However, it may be taxable in your country of residence.

Can NRIs claim Section 80C deductions?

Yes. NRIs can claim 80C deductions (PPF, ELSS, LIC, home loan principal) under the old tax regime.

What is the tax rate on NRI capital gains from property?

LTCG (property held 24+ months): 12.5% without indexation. STCG: 30% (slab rate). TDS is deducted by the buyer at these rates.

---

NRI with Indian income? I handle NRI ITR filing starting ₹999. Message me on WhatsApp with your income details.