Non-Resident Indians (NRIs) should generally file ITR-2 for filing their income tax returns in India. ITR-1 is usually not suitable for NRIs because they often have income from capital gains (stocks/mutual funds), multiple house properties, or foreign assets, which necessitate the use of ITR-2.
NRIs are not eligible for the simpler ITR-1 form and must file using ITR-2 or ITR-3 depending on their specific financial situation. Choosing the correct form ensures compliance with Indian tax laws and avoids penalties or delays.
Income Ceiling: ITR-1 has an income limit of ₹50 lakh total income. If your total taxable income for the year is more than ₹50,00,000, you cannot use ITR-1. Such taxpayers will need to use ITR-2 (or another appropriate form) because ITR-2 has no upper income limit – it can handle incomes above ₹50 lakh without issues.
As an NRI, PIO, or OCI, you may be required to file tax returns in India if your Indian income surpasses the specified threshold or if you seek to claim refunds for excess tax deductions. While filing an ITR is mandatory only under certain circumstances, voluntary filing can be beneficial in many ways.
Form ITR – 2 can be used by an individual and Hindu Undivided Family who is not eligible to file ITR-1 Sahaj and not having income from “profit and gains of business or profession” and also not having income from “Profits and gains of business or profession” in the nature of interest, salary, bonus, ...
ITR-1 (Sahaj): Salaried individuals with exempt income up to ₹5,000. ITR-2: If exempt income exceeds ₹5,000 or includes agricultural income above ₹5,000.
Specifically, Schedule FA (Foreign Assets) in the ITR form is meant for reporting foreign assets, and Schedule FSI (Foreign Source Income) is for reporting income from foreign sources. Additionally, taxpayers can claim tax relief on taxes paid abroad by filing Schedule TR (Tax Relief) along with Form 67 online.
New rules for NRIs in India focus on stricter tax residency criteria from April 2026, increasing the stay threshold to 120 days for high-income NRIs (over ₹15 lakh Indian income) to become Resident but Not Ordinarily Resident (RNOR) and introducing "deemed residency" for high-income Indians in tax havens; also, higher TCS thresholds for LRS remittances (to ₹10L) and removal of TCS for education loans are recent changes from Budget 2025-26, alongside increased reporting of foreign assets.
As per the Income-tax Act , interest received from NRE account is exempt from taxes for an individual, till the time the individual qualifies as person resident outside India (PROI) under the provisions of the Foreign Exchange Management Act, 1999 (Fema) or is a person who has been permitted by RBI to maintain the said ...
Non-resident Indians (NRIs) are taxed on income earned or collected in India. This could be from sources like property rent, share dividends, and investment and savings capital gains, if over a specified limit. Income earned outside India is not taxable in India.
ITR 1 is filed for individuals who earn income under the head Salaries, and if your total income is below Rs. 50 Lakhs. You can file ITR 2 if you have capital gains, more than one house property, or your income has exceeded Rs. 50 Lakhs .
Follow the below steps to file and submit the ITR through online mode:
You can file the revised return without waiting for the processing. Just make sure you select the correct return filing section and then mention the previous acknowledgement number in the ITR form. Do this only if ITR-2 is applicable for you, not otherwise.
Instead, they need to convert their savings account into an NRO account. That is why you must declare yourself as an NRI, and start complying with the respective rules and regulations as soon as your resident status changes. Not doing so can attract legal and financial penalties.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
You cannot file ITR-1, if you have capital gains from mutual funds, equity shares, house property etc., even if your income does not exceed Rs. 50,00,000. Yes, you can file ITR-1 as long as you do not own another house property. Individuals having total income of less that Rs.
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NRE Account: Interest is completely tax-free under Section 10(4)(ii) of the Income Tax Act, 1961, however it must be reported in the ITR. FCNR Account: Interest is tax-free and freely repatriable as per section 10(15)(iv)(fa) of the Income Tax Act, 1961.
With the recent changes in the Indian Income Tax Act, it's now possible to pay zero tax on a salary of up to Rs. 7 lakhs. To pay zero tax on a 7 lakh salary using the old tax regime, maximize deductions: Claim Tax Rebate under Section 87A.
Basic exemption for NRIs under the old regime starts at ₹2.5 lakh and under the new regime at ₹3 lakh, but certain slabs and surcharge apply when income is higher.
Your NRI status is considered a NOR status for 2-3 years after you return to the country. After this, your status is that of a ROR and the taxation rules applicable to all resident Indians will be applicable to you as well.
The extension of the due date for filing Income Tax Returns for FY 2024–25 (AY 2025–26) to 15 September 2025 provides additional time for taxpayers to complete their compliance obligations.
ITR-2 - Applicable for Non-Resident Individual
This return is applicable for Individual (whether Resident or Non-Resident) and Hindu Undivided Family (HUF). Having Income under any head other than Profits and Gains of Business or Profession.
Non-residents cannot use ITR-1. ITR-4 (Sugam) is for resident individuals (Resident and NRI), HUFs, and firms (other than LLPs) with the same income sources as ITR-1 plus business or professional income under presumptive taxation (Sections 44AD, 44ADA, or 44AE).
In Schedule FA, you need to provide details of foreign asset or income from any source outside India. This schedule need not be filled up if you are Not Ordinarily Resident or a Non-Resident.