Do NRIs need to file an ITR? Every case where you must (and where you don't)

Is this you? This guide is for individuals. Moving back to India this year? Check how your residency status is decided first. Selling a flat? The tax on the sale is in selling property in India as an NRI.

This assumes you're a non-resident for the whole tax year. Moving back this year? Check your residency status first, because the answer can change.

The tests, in one table

A return is compulsory if any one of these applies to you. Meeting one is enough; you don’t need all of them.

The tax year (2026-27) runs from 1 April to 31 March. Under the old Act it was the financial year, with the return filed in the following “assessment year”.

When you must file

Your income is above the limit

The main test compares your income with the basic exemption limit, the most that isn’t chargeable to tax at all: ₹4 lakh under the new regime, which applies unless you choose otherwise. As a non-resident you get no rebate, so for you that’s also the most you can earn tax-free. As a non-resident, only your Indian income counts: interest on NRO deposits, rent, dividends, gains on Indian shares, funds and property, and any Indian salary. Your salary abroad doesn’t, and nor does interest on deposits in an NRE account or an FCNR account, which is tax-free for NRIs. 2025 Act s. 263(1)was s. 139(1)

The trap is when you measure it. The test uses your income before the exemptions for reinvesting a gain in a new home or in capital-gain bonds, and before deductions such as insurance or pension contributions. So if you sell a flat, reinvest the whole gain and owe no tax, you still have to file if the gain itself was above the limit. The return is also where you claim the exemption, so skipping it would cost you the exemption too. Our guide to reinvesting the gain to pay less tax covers the conditions. 2025 Act s. 82was s. 54 2025 Act s. 85was s. 54EC

Enough tax was deducted to trigger a return

This one catches many NRIs who are sure they are under the limit. Banks deduct tax deducted at source on NRO interest at 30% plus surcharge and 4% cess, so it doesn’t take much interest before the tax held back crosses the line. Once the total deducted from you in the year, by every payer together, reaches ₹25,000, a return is compulsory even if your income is under the limit. Your Form 168 (was Form 26AS) on the e-filing portal shows the total. 2025 Act s. 263(1)was s. 139(1)

This condition, and the three below, come from rule 163 of the Income-tax Rules, 2026, which replaced the old rule 12AB. They apply to any individual, resident or not, except that a resident aged 60 or over uses ₹50,000 for the tax-deducted figure.

Large deposits, travel or electricity

You must also file if, during the tax year, you:

• deposit more than ₹1 crore in one or more current accounts;
• deposit ₹50 lakh or more in total in savings accounts;
• spend more than ₹2 lakh on foreign travel, for yourself or anyone else;
• pay more than ₹1 lakh in electricity bills.

Two of these are unclear for NRIs, so treat them as grey areas. Whether money paid into NRE or NRO savings accounts counts towards the savings figure isn’t settled; the rule says savings accounts without any exception. And whether a trip from India back to the country you live in is “travel to a foreign country” hasn’t been tested. There are also conditions for business turnover and professional fees, which rarely apply to someone working abroad.

You have a capital loss to carry forward

If you sold shares, funds or property at a loss, you can set that loss against gains in later years, for up to 8 years. But only if the loss was reported in a return filed by the due date. A late return can still get your refund, but the loss is gone. This applies even if you have no other income at all. 2025 Act s. 263(1)(a)(viii)was s. 139(3) 2025 Act s. 121was s. 80

When you don’t have to

Your only income is investment income taxed in full

This is the exemption only non-residents get, and it comes in two versions:

• Dividends and some interest. If your only Indian income is dividends, interest on money the government or an Indian company borrowed in foreign currency, or income from certain funds bought in foreign currency, and the payer deducted tax at the full rate, you needn’t file. 2025 Act s. 207(8)was s. 115A(5)
• Investment income from assets you bought with foreign currency. If you’re an Indian citizen or of Indian origin, and your only income is income or long-term gains from shares in an Indian company, public-company debentures or deposits, or central government securities you paid for in foreign currency, with tax deducted, you needn’t file either. 2025 Act s. 216was s. 115G

Both depend on all your Indian income being of that kind. A single rupee of rent or NRO interest takes you outside them, and then the normal tests apply. NRO interest doesn’t qualify: bank interest isn’t on the list for the first version, and deposits in an NRO account are rupee deposits, not foreign-currency assets.

This exemption also lifts the tax-deducted and spending conditions: the Act says no return is needed without carving those out. The department hasn’t confirmed it in writing, though, so treat that part as a grey area.

You’re under every threshold

If your Indian income is at or below ₹4 lakh, less than ₹25,000 was deducted, none of the spending conditions applies and you have no loss to keep, the law doesn’t require a return. You may still want to file, for the reasons below.

Your foreign income and assets stay out of it

As a non-resident you never report your salary abroad, your foreign bank accounts or your home overseas in an Indian return. The rule that makes holding assets abroad a reason to file, and the schedule where they’re listed, apply only to residents who are ordinarily resident. RNORs are outside it too. 2025 Act s. 263(1)was s. 139(1)

When you should file anyway

“Not required” isn’t the same as “better off not filing”. File anyway if:

• Tax was over-deducted. A refund can only be claimed through a return. Banks, tenants and buyers deduct at flat non-resident rates without knowing your other income or your exemption limit, so many NRIs are owed money. Our guide to claiming back TDS on NRO interest covers the most common case. 2025 Act s. 433was s. 239
• You sold property. The buyer deducts tax on your whole sale price unless you had a lower-deduction certificate. That is usually far more than the tax on your gain, and the return is where the difference comes back.
• A treaty rate is lower than what was deducted. If the payer deducted at the Indian rate, you claim the treaty rate in your return, with your tax residency certificate and Form 41 (was Form 10F). 2025 Act s. 159was s. 90
• You’ll need proof of income later. An Indian return is the cleanest record of what you earned and paid in India: banks ask for it when you move sale proceeds abroad, and your tax office at home may ask for it when you claim credit for Indian tax.

Check your own year

Three NRIs, three answers

Same rules, three different results. Each has no other Indian income.

If you don’t file when you have to

Not filing a compulsory return costs more than the return would have taken to prepare:

• A late fee of ₹5,000, or ₹1,000 if your total income is ₹5 lakh or less. 2025 Act s. 428was s. 234F
• Interest at 1% a month on any tax still unpaid after TDS, from the due date until you file. If TDS already covers your tax, there’s nothing for this to run on. 2025 Act s. 423was s. 234A
• Your refund waits, and a capital loss is lost for good once the due date passes.
• A notice. The department sees the TDS against your PAN and the payments reported by banks. A notice for a missing return usually leads to filing anyway, on its timetable instead of yours.

You can still file late: a belated return is accepted until 31 December 2027, and after that an updated return can be filed for up to 48 months after the end of the following financial year, with extra tax. An updated return can’t claim a refund, though. After the belated deadline, the only route to a refund is a request to the department to accept a late claim, which it grants at its discretion. Don’t count on it. 2025 Act s. 263(4)was s. 139(4)

One thing you no longer need to worry about: the old rule that made payers deduct TDS at double the rate from people who hadn’t filed returns was removed by the Finance Act, 2025, and the 2025 Act has no equivalent. It never applied to non-residents without a business base in India anyway. What does still apply is a higher rate if you don’t give the payer your PAN.

The year you move back

Your filing duty follows your residency status, which is decided afresh every tax year. In the year you return you may be an RNOR taxpayer: resident, but with most foreign income still outside Indian tax. The tests above apply to you in the same way, with one difference: if you’re 60 or over, the tax-deducted figure is ₹50,000 instead of ₹25,000. The rule on assets abroad still doesn’t apply. Once you’re resident and ordinarily resident, your worldwide income counts towards the limit, and holding any foreign account, shares or property makes a return compulsory, with every one of them listed.

That makes the status question the one to settle first, especially if you spent a long stretch in India this year: the residency checker linked under the short answer at the top of this page takes you through the day tests.

Forms and deadlines

The return form for tax year 2026-27 is ITR-2 for most NRIs with interest, rent or gains; the department notifies the forms each spring.

If you live in the US, Canada or the UAE

Your Indian filing duty doesn’t depend on where you live. What changes is what the Indian return does for you at home.