ITR for NRI 2026: Which Form, What Income, and How to File
Do NRIs Need to File ITR in India?
Yes, if your Indian income exceeds the basic exemption limit (Rs 2.5 lakh under old regime, Rs 3 lakh under new regime for FY 2025-26). Indian income includes: salary received in India, rental income from Indian property, capital gains from Indian assets, interest from Indian bank accounts/FDs, and dividends from Indian companies.
Which Form to Use
| Income Type | ITR Form |
|---|---|
| Salary + capital gains + rental income | ITR-2 |
| Business/professional income in India | ITR-3 |
| Only interest/dividend income | ITR-2 |
NRIs cannot file ITR-1 (Sahaj). The simplest form available to NRIs is ITR-2.
Key Tax Rules for NRIs
- Only income earned/received in India is taxable in India
- Foreign income is NOT taxable in India for NRIs
- TDS on NRI income is typically at higher rates (e.g., 30% on rent, 20% on FD interest)
- NRIs can claim DTAA (Double Tax Avoidance Agreement) benefits to avoid double taxation
- Section 87A rebate is NOT available to NRIs
- NRIs must report foreign bank accounts in Schedule FA if applicable
Filing Process for NRIs
- Determine your residential status (NRI/RNOR/Resident) based on days spent in India
- Calculate Indian income only
- Claim deductions (limited set available to NRIs)
- Claim DTAA relief if tax was paid in both countries
- File using ITR-2 or ITR-3 online
- E-verify (Aadhaar OTP works if Indian mobile is active; otherwise use net banking or EVC)
Common NRI Tax Situations
- Selling Indian property — LTCG at 12.5% (above Rs 1.25 lakh exemption), buyer must deduct TDS at 12.5%
- Rental income — Taxed at slab rates, tenant must deduct TDS at 31.2%
- NRO FD interest — Bank deducts TDS at 30% + cess; claim refund if lower rate applies via DTAA
- ESOP/RSU from Indian company — Taxed as perquisite at exercise + STCG/LTCG at sale