How NRIs file ITR in India: Rules, forms & DTAA (AY 2026-27)

Non-Resident Indians (NRIs) pay income tax in India only on income that is taxable in India under the Income Tax Act. This includes income such as salary earned in India, rental income from property in India, capital gains from assets in India, and interest from eligible Indian bank accounts.

This guide explains how to determine your residential status, which income is taxable in India, which ITR form you should file, how tax treaties may affect your tax liability, and the deductions and relief available to NRIs.

For the overall filing process, see our ITR filing guide for FY 2025-26.

Key takeaways

• NRIs are generally taxed only on income that is taxable in India.
• Most NRIs file ITR-2 or ITR-3. ITR-1 and ITR-4 are not available to non-residents.
• Section 87A rebate is not available to non-residents. Relief under a Double Taxation Avoidance Agreement (DTAA) may be available if the applicable treaty conditions are met.
• For Assessment Year 2026-27, the due date for non-audit returns is 31 July 2026.

Step 1: Determine your residential status

Your residential status determines which income is taxable in India. The Income Tax Act requires you to determine your residential status separately for each financial year based on the number of days you are present in India.

For FY 2025-26, you are generally treated as a resident if either of the following conditions is met:

• You were in India for 182 days or more during the financial year.
• You were in India for at least 60 days during the financial year and for at least 365 days during the four preceding financial years.

If neither condition applies, you are generally treated as a non-resident.

The Income Tax Act provides different day-count rules for certain taxpayers. If you are an Indian citizen leaving India for employment outside India, or an Indian citizen or person of Indian origin visiting India, the 60-day condition is generally replaced with 182 days. If you are an Indian citizen or person of Indian origin visiting India and your Indian income, excluding foreign-source income, exceeds ₹15 lakh, the 182-day threshold is reduced to 120 days.

The deemed resident provisions may apply to an Indian citizen whose Indian income exceeds ₹15 lakh and who is not liable to tax in any other country or territory because of domicile, residence, or similar criteria.

Calculate your days of stay using your passport, immigration records, and travel documents.

What income is taxable for an NRI?

If you are a non-resident, India generally taxes only income that accrues, arises, or is received in India, or is deemed to accrue or arise in India under the Income Tax Act.

This includes:

• Salary for services rendered in India.
• Rental income from property located in India.
• Capital gains from the transfer of assets located in India, including property, shares, and mutual funds.
• Interest from taxable bank accounts and deposits in India.
• Dividends from Indian companies.
• Business or professional income that is taxable in India.

Foreign salary and other foreign-source income are generally not taxable in India for a non-resident.

Interest earned on NRE and FCNR accounts is generally exempt from tax while you qualify as a non-resident and the applicable conditions are met. Interest earned on an NRO account is taxable in India and is generally subject to TDS, which may be reduced if you are eligible to claim relief under an applicable Double Taxation Avoidance Agreement (DTAA).

Which ITR form should you file?

If you are a non-resident, you cannot file ITR-1 (Sahaj) or ITR-4 (Sugam). Both forms are available only to resident taxpayers.

Use ITR-2 if you have income from salary, house property, capital gains, or other sources, and you do not have business or professional income.

Use ITR-3 if you have business or professional income in India or income from futures and options (F&O) trading.

Choose the return form that matches your sources of income. Filing the wrong form can result in a defective return.

When must you file an income tax return?

You must file an income tax return if:

• Your taxable income in India exceeds the applicable basic exemption limit.
• You have taxable capital gains from the sale of property, shares, or other capital assets in India.
• Any other filing requirement under the Income Tax Act applies to you.

You may also choose to file a return to claim a refund of excess TDS or to obtain income tax records for visa, immigration, or loan applications.

Key differences for NRIs

If you are a non-resident, these rules differ from those for resident taxpayers:

• The rebate under Section 87A is not available.
• The higher basic exemption limits available to resident senior citizens do not apply.
• TDS is deducted at the rates prescribed for non-residents, unless a lower rate applies under an applicable Double Taxation Avoidance Agreement (DTAA) or other provision of law.
• Some deductions and exemptions available to resident taxpayers are not available to non-residents.

Deductions NRIs can claim

If you choose the old tax regime and meet the applicable conditions, you can claim deductions under provisions including:

• Section 80C for eligible investments and payments such as life insurance premiums, ELSS investments, eligible tuition fees, and repayment of home loan principal.
• Section 80D for eligible health insurance premiums.
• Section 80E for interest paid on eligible education loans.
• Section 80G for eligible donations.
• Section 80TTA for interest earned on eligible savings bank accounts.

Some deductions available to resident taxpayers are not available to non-residents. These include deductions for investments in the Public Provident Fund (PPF), National Savings Certificate (NSC), and the Senior Citizens Savings Scheme (SCSS), the deduction under Section 80TTB, and deductions under Sections 80U and 80DD.

DTAA: Avoiding double taxation

If the same income is taxable in India and in your country of residence, a Double Taxation Avoidance Agreement (DTAA) may reduce or eliminate double taxation. India has DTAA agreements with many countries.

A DTAA generally provides relief through one of two methods:

• The exemption method, where the income is taxable in only one country.
• The tax credit method, where tax paid in one country is allowed as a credit in the other country, subject to the terms of the treaty.

To claim DTAA benefits, you generally need:

• A Tax Residency Certificate (TRC) issued by your country of residence.
• Form 10F, filed on the income tax e-filing portal where required.
• Form 67, if you are claiming foreign tax credit under the Income Tax Rules.

If you want tax to be deducted at the treaty rate instead of the domestic rate, submit the required documents to the payer before the payment is made.

TDS and refunds

Tax deducted at source (TDS) for non-residents is often higher than the final tax liability. If excess tax has been deducted, you can claim a refund by filing an income tax return.

This is common when selling property in India. Under Section 195, the buyer must deduct TDS from the payment to a non-resident seller. The amount deducted may be higher than the capital gains tax ultimately payable.

If you expect excess TDS, you can apply for a certificate for lower or nil deduction under Section 197 before the transaction. Before filing your return, reconcile the TDS shown in Form 26AS and the Annual Information Statement (AIS).

Choosing between the old and new tax regime

The new tax regime applies by default to non-residents as well.

The rebate under Section 87A is available only to resident individuals who satisfy the conditions in the Income Tax Act. Non-residents cannot claim this rebate.

Before filing your return, calculate your tax liability under both the old and new tax regimes if you are eligible to choose between them.

How to file your return

1. Determine your residential status for FY 2025-26.
2. Keep your PAN, Indian bank account details, Form 16 or Form 16A, Form 26AS, the Annual Information Statement (AIS), capital gains statements, and DTAA documents, if applicable, ready.
3. Log in to the income tax e-filing portal and select ITR-2 or ITR-3 for Assessment Year 2026-27, as applicable.
4. Report your taxable income from India and claim DTAA relief where eligible.
5. Choose your tax regime, claim eligible deductions, review the tax calculation, and pay any balance tax due.
6. Submit your return and complete e-verification within the prescribed time using an available verification method.

For Assessment Year 2026-27, the due date is 31 July 2026 for non-audit cases and 31 October 2026 where a tax audit applies.

Common mistakes

• Filing ITR-1 instead of ITR-2 or ITR-3.
• Claiming relief under a DTAA without the required supporting documents.
• Not reconciling TDS with Form 26AS and the Annual Information Statement (AIS).
• Not applying for a lower or nil deduction certificate under Section 197 before a property transaction where excess TDS is expected.
• Filing the return without completing e-verification.

A note on getting the status right first

For NRIs, almost everything flows from residential status, so the money and effort are best spent getting that right before anything else. A miscounted stay, an ignored deemed-resident rule, or a wrong ITR form can turn a simple refund claim into a notice. If your situation involves a property sale, DTAA relief, or a year where your status is borderline, the cost of a qualified adviser is usually small next to the tax at stake. File on the correct status, with the right form and documents, and the rest becomes straightforward.

Frequently asked questions

Which ITR form should an NRI file?

Most NRIs file ITR-2, which covers salary, house property, capital gains, and other income. NRIs with business or professional income in India, including F&O, file ITR-3. NRIs cannot use ITR-1 or ITR-4.

Is NRE account interest taxable in India?

No. Interest on NRE and FCNR accounts is tax-free for NRIs, provided FEMA conditions are met. Interest on an NRO account is fully taxable, with TDS at 30%, which can be reduced under DTAA.

Do NRIs get the Section 87A rebate?

No. The Section 87A rebate is available only to resident individuals. NRIs pay tax from the first rupee above the basic exemption limit, which is ₹2.5 lakh under the old regime or ₹4 lakh under the new.

How does DTAA help NRIs avoid double tax?

DTAA lets you avoid being taxed on the same income in both India and your country of residence, either through exemption or a tax credit. You need a Tax Residency Certificate and Form 10F to claim it, and it can reduce TDS on income like NRO interest to a lower treaty rate.

How is TDS on an NRI’s property sale handled?

The buyer deducts TDS under Section 195, often on the full sale value, which can exceed the actual tax. To avoid a large stuck refund, apply for a Lower Deduction Certificate under Section 197 before the sale, and claim any excess as a refund by filing your ITR.

What is the last date for an NRI to file ITR?

31 July 2026 for non-audit cases for AY 2026-27, and 31 October 2026 for audit cases. NRIs with business income filing ITR-3 have until 31 August 2026 if not under audit.

Sources and references

• Income Tax Department, e-filing portal and non-resident guidance — incometax.gov.in
• Income Tax Act, 1961 — Sections 6 (residential status), 6(1A), 90/91 (DTAA), 195, 197, 87A
• Forms 10F, 67, and the Tax Residency Certificate requirement for treaty relief

Disclaimer

This guide is for general informational purposes and is accurate to the best of our knowledge as of July 2026. NRI taxation depends heavily on your residential status, the specific DTAA with your country, and your individual facts. Tax laws can change. Please verify current details on incometax.gov.in and consult a qualified Chartered Accountant experienced in NRI taxation before acting on any information here.