ITR for NRI: Filing Rules, Taxable Income, Documentation and Benefits in 2025

Filing an ITR is essential for NRIs with income in India, whether from salary, rent, or investments. Understanding the correct ITR form ensures compliance and prevents penalties. This guide covers how to file required documents, calculate taxable income and deductions and understand key deadlines for hassle-free NRI tax filing.

How to File an ITR for NRIs?

Filing Income Tax Returns (ITR) in India as a Non-Resident Indian (NRI) comprises a series of methodical steps designed to ensure both accuracy in self-reporting and adherence to Indian tax regulations. Each stage addresses specific legal and procedural requirements to facilitate accurate tax liability assessment and promote full compliance with the statutory framework.

• Step 1: Confirm NRI Status
  • Determine residential status as per the Income Tax Act (based on the number of days spent in India).
• Step 2: Align Income & Taxes with Form 26AS [1]
  • To avoid discrepancies, cross-verify all your income sources and TDS deductions with Form 26AS.
• Step 3: Calculate Taxable Income & Assess Tax Liability
  • Include income earned or accrued in India — such as rent, salary, or capital gains — and compute total tax payable.
• Step 4: Utilize Double Taxation Treaty Relief
  • Utilize the Double Taxation Avoidance Agreement (DTAA), a treaty between India and your country of residence designed to prevent the taxation of the same income in both jurisdictions. For example, you earn rental income from a property in India while being a tax resident of the United States. In that case, the DTAA allows you to either claim a tax credit in the United States for the taxes paid in India or opt for exemption, depending on the terms of the agreement. This mechanism ensures that your income is not subject to double taxation, thereby promoting equitable tax treatment.
• Step 5: Choose the Appropriate ITR Form & Detail Exempt Income
  • NRIs usually file using ITR-2( those with only salary and interest income may use) or ITR-1(Report exempt income separately).
• Step 6: Report Your Bank Account Details
  • Provide Indian NRO or NRE bank account details for refunds and transactions.
• Step 7: Detail Assets and Liabilities
  • NRIs with income above ₹50 lakh must disclose movable and immovable assets held in India.
• Step 8: Complete ITR Verification
  • After submitting, verify your tax return using one of these methods: OTP from Aadhaar (a unique identification number), EVC (an electronic verification code), or by mailing a signed physical copy to the Central Processing Centre (CPC) in Bengaluru.

Documents Required for NRI ITR Filing

Before starting the NRI income tax return (ITR) filing process, it is essential to gather all necessary documents to ensure accuracy and efficiency. These documents typically include identity proofs, tax certificates, financial statements, and supporting records for income and deductions, as detailed in the following list:

•  Valid Passport (to confirm NRI status)
•  PAN Card
•  Form 16/16A (for salaried individuals or TDS certificates)
•  Form 26AS (Tax Credit Statement)
•  Bank account details (NRE/NRO accounts)
•  Investment proofs (for eligible deductions)
•  Property ownership and rent details
•  Capital gains statements (if applicable)

Taxable Income for NRIs: What You Need to Know?

Understanding the tax implications for Non-Resident Indians (NRIs) in India is essential for effective financial planning and compliance with Indian tax laws. Below is a guide to taxable income for NRIs.

1. Income from Salary

• Salary Received in India: If an NRI earns a salary exceeding ₹2.5 lakh from an Indian company or for services rendered in India, it becomes taxable in India. Such individuals are required to file an income tax return under Section 139(1) of the Income Tax Act, ensuring compliance with Indian tax regulations.
• Salary Earned in India: If an NRI earns a salary for services rendered in India, it is taxable in India, regardless of where it is paid. The income is taxed as per the applicable income tax slab rates, and the individual must file a return to report this income accordingly.

2. Income from House Property

Income generated from a property in India is subject to the prevalent tax rates. 

• All capital gains obtained through renting, selling, or leasing a property are taxable. 
• NRIs can avail of a 30% deduction on home loans taken in India and can claim deductions for principal repayment, registration fees, and stamp duty under Section 80C. 
• If a property is rented out to a tenant by an NRI, the tenant is entitled to deduct 30% tax and must complete Form 15CA.

3. Income from Other Sources

Tax Liability on Interest:

• Taxable: Interest on fixed deposits and savings accounts in Indian banks, and interest on NRO accounts.
• Non-taxable: Interest on NRE and FCNR accounts.

4. Income from Capital Gains

Both short and long-term capital gains and income from securities held by NRIs in India are subject to tax. Any gains from shares and capital gains on asset transfers in India are also taxable.

• 20% on Long-term capital gains.
• 30% on Short-term capital gains.

5. Investments

NRIs can enjoy certain tax benefits on their investment income in India. 

• When an NRI invests in specific assets in the country, they are subject to a 20% tax rate.
• However, if Tax Deducted at Source (TDS) has been subtracted from the investment income, they are not required to file tax returns. 
• Investments in securities issued by the central government, shares in Indian companies, and deposits with publicly listed companies are among the options that qualify for these tax benefits.

Here is a table showing NRI income sources which will be taxed and which aren’t

Deductions for NRIs on Income Tax in India

Available Deductions for NRIs

• Section 80C [2]: NRIs are entitled to claim deductions under Section 80C for specific investments and expenses. These include tuition fees for children, Unit Linked Insurance Plans (ULIPs), premiums for life insurance policies, and principal amount repaid on housing loans under the Equity Linked Savings Scheme (ELSS).
• Section 80D: Premiums paid for health insurance policies qualify for deductions under Section 80D.
• Section 80G: NRIs can claim deductions for donations made to charitable organizations under Section 80G.
• House Property: Income arising from house property situated in India, property tax payments, and interest on home loans are eligible for deductions for NRIs.
• Section 80E: NRIs can avail deductions on the interest earned from student loans under Section 80E.
• Section 80TTA: Interest income on savings accounts is deductible up to Rs. 10,000 under Section 80TTA.

Deductions Not Available to NRIs

• Section 80CCG: NRIs are not eligible for deductions under Section 80CCG, which pertains to investments under the Rajiv Gandhi Equity Savings Scheme (RGESS).
• Sections 80U, 80DD, and 80DDB: Deductions under these sections, which are available for differently-abled individuals, do not apply to NRIs.
• Other Investments: Certain investment vehicles including the Senior Citizen Savings Scheme, National Savings Certificates (NSCs), 5-Year Post Office Deposit Scheme, and Public Provident Fund (PPF) are also not available for deductions to NRIs.

Important Deadlines and Penalties for NRI Filing Income Tax

Submitting income tax returns within the prescribed deadline mitigates the risk of incurring statutory penalties and facilitates the prompt processing of tax refunds.[3]

• Due Date: 31st July (for individuals not requiring audit)
• Revised Return: Can be filed before 31st December of the assessment year
• Late Fee (U/s 234F): ₹1,000 to ₹5,000 depending on income and filing date
• Interest on Delay: Charged under Sections 234A/B/C

How NoBroker Legal Services Simplifies NRI Tax Filings?

NoBroker’s legal experts assist NRIs with ITR filing, form selection, and compliance. From verifying income details to claiming DTAA benefits and deductions, our team ensures accurate filing and timely submissions, saving you time and effort while avoiding penalties.