Who Is Considered an NRI for Income Tax?
You are treated as an NRI for income tax purposes if you do not satisfy the residential status conditions under the Income Tax Act. Residential status is determined based on number of days stayed in India during the financial year.
Is ITR Filing Mandatory for NRIs?
An NRI must file ITR in India if:
- Total Indian income exceeds the basic exemption limit
- TDS has been deducted and refund is to be claimed
- Capital gains arise from sale of Indian assets
- You want to carry forward losses
- Compliance is required for loans, visa, or documentation
Income Taxable for NRIs in India
Only income earned or received in India is taxable for NRIs, such as:
- Salary received for services rendered in India
- Rental income from Indian property
- Capital gains on Indian assets
- Interest from Indian bank accounts (except exempt NRE interest)
- Business income from India
Foreign income is not taxable in India for NRIs.
Step-by-Step Process to File Income Tax Return for NRI
Step 1: Collect Required Documents
Keep the following ready:
- PAN card
- Passport (for residential status)
- Form 16 / Form 16A
- Form 26AS and AIS
- Bank statements
- Capital gain statements (if applicable)
Step 2: Login to Income Tax e-Filing Portal
Visit the official income tax e-filing website and log in using:
- PAN
- Password
- Captcha
Step 3: Select “File Income Tax Return”
Go to:
e-File → Income Tax Returns → File Income Tax Return
Choose:
- Assessment Year
- Online mode
Step 4: Select Residential Status as NRI
While filing the return, select your residential status as Non-Resident correctly. This step is critical to ensure correct tax computation.
Step 5: Choose the Correct ITR Form
NRIs generally file:
- ITR-2 – If income includes capital gains or more than one house property
- ITR-3 – If income includes business or professional income
ITR-1 is not applicable for NRIs.
Step 6: Enter Income and Tax Details
Fill in:
- Indian income details
- TDS deducted
- Deductions under Chapter VI-A (if applicable)
- Capital gains details
Ensure data matches Form 26AS and AIS.
Step 7: Calculate Tax Liability
The portal will auto-calculate:
- Tax payable or refund
- Interest, if applicable
Pay additional tax if required before submission.
Step 8: Verify and Submit the ITR
Submit the return and verify using:
- Aadhaar OTP
- Net banking
- Digital Signature Certificate (DSC)
Unverified returns are treated as invalid.
Due Date for NRI ITR Filing
- 31 July – If audit is not applicable
- 31 October – If audit is applicable
Late filing may attract penalties and interest.
Common Mistakes NRIs Should Avoid
- Selecting wrong residential status
- Filing incorrect ITR form
- Ignoring capital gains tax
- Not reporting TDS correctly
- Missing e-verification
Benefits of Filing ITR for NRIs
- Claim income tax refunds
- Avoid income tax notices
- Maintain clean compliance record
- Useful for loans, visas, and repatriation
Why Choose Saving Mantra for NRI Tax Filing?
Saving Mantra offers specialized NRI taxation services including:
- Residential status evaluation
- Accurate ITR filing for NRIs
- Capital gains and DTAA advisory
- End-to-end compliance support
Disclaimer
This article is for informational purposes only and does not constitute legal or tax advice. Income tax laws are subject to change and interpretation. NRIs are advised to consult a qualified tax professional before filing their Income Tax Return. Saving Mantra shall not be responsible for any loss arising from reliance on this information.