The choice between filing ITR 1 or 2 for NRI isn’t really a choice, it's predefined by eligibility. ITR 1 (Sahaj) is exclusively for resident individuals with simple income: salary, pension, one house property, and other sources. It includes interest provided total income doesn’t exceed Rs. 50 lakh and no capital gains or foreign assets are involved. NRIs are not eligible to use ITR-1, as their income sources typically go beyond the limited scope covered by the form.
As an NRI, Should I File ITR 1 or ITR-2?
ITR-1 does not accommodate foreign income, capital gains, multiple properties, or foreign assets, which are common in NRI taxation scenarios.
Instead, NRIs must file using ITR-2 (or ITR-3, depending on circumstances). ITR-2 is better suited because it caters to:
Income from salary, pension, multiple house properties, capital gains (both short- and long-term),
Foreign income and assets, and agricultural income over Rs. 5,000 essential for accurate reporting.
For NRIs engaged in business or professional activity in India, ITR-3 would be the appropriate form but in most cases, especially for salaried NRIs with capital gains or foreign assets, ITR-2 is the optimal and mandated choice.
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Which is Better ITR 1 or 2 for NRI?
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2025-08-28T11:43:08+00:00 2025-08-28T11:43:10+00:00Comment
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