In this article
Legal periods covered: FY 2025-26 (AY 2026-27) and Tax Year 2026-27
Legal review basis: Indian income-tax legislation and notified rules reviewed on 19 October 2026.
An NRI does not have to file an Indian income-tax return merely because they live abroad, hold an Indian bank account or own property in India. But being an NRI does not automatically exempt them from filing.
The obligation depends on the individual’s Indian income-tax residential status, income chargeable in India, statutory filing thresholds, additional filing conditions and any express non-filing exemption.
Tax deducted at source (TDS) does not necessarily settle the question. An NRI may have no further tax payable and still be required to file. Conversely, certain categories of non-resident income qualify for a statutory non-filing exception when all prescribed conditions are met.
The applicable year also matters. FY 2025-26 is governed by the Income-tax Act, 1961, while Tax Year 2026-27 is governed by the Income-tax Act, 2025.
Who is considered an NRI for Indian income-tax filing?
The first question is whether the individual is non-resident under Indian income-tax law for the relevant year.
Indian tax residence is not determined merely by citizenship, an OCI card, an overseas visa or an NRE bank account. The statutory residence tests must be applied to the individual’s facts and travel history.
A person resident outside India under the Foreign Exchange Management Act (FEMA) may also need an independent examination of their Indian income-tax residence. The two laws use different tests and serve different purposes.
For an individual who is non-resident under Indian income-tax law, India generally taxes income received or deemed received in India and income accruing, arising or deemed to accrue or arise in India, subject to the applicable domestic provisions and treaty relief.
Indian property income, bank interest, dividends and capital gains may therefore remain relevant even when the owner lives abroad.
Conversely, overseas salary is not automatically taxable in India merely because money already received abroad is subsequently remitted into an Indian bank account. The source, place of employment and point of first receipt must be distinguished.
What changes when an NRI returns to India?
A returning Indian should reassess whether they are non-resident (NR), resident but not ordinarily resident (RNOR), or resident and ordinarily resident (ROR).
Once a person becomes ROR, holding specified foreign assets, having foreign-account signing authority or qualifying as a beneficiary of certain foreign assets may independently require an Indian income-tax return even if the ordinary income threshold is not exceeded.
This requirement appears in section 139(1) of the 1961 Act and section 263(1)(a)(ix) of the 2025 Act, subject to their statutory conditions.
An Indian who has returned from the USA and retained a US brokerage account should therefore not continue relying on a non-resident filing conclusion from an earlier year.
When must an NRI file an Indian income-tax return?
The ordinary requirement is based on the statutory income threshold.
Section 139(1) of the Income-tax Act, 1961 and section 263(1) of the Income-tax Act, 2025 require qualifying individuals to file when their income, measured under the relevant filing test, exceeds the maximum amount not chargeable to income-tax.
However, the filing test does not always use taxable income after every claimed deduction or relief. Specified deductions and exclusions must be disregarded when the legislation requires this.
What is the basic exemption limit for an NRI?
For the two periods addressed here, the ordinary slab thresholds are:
| Period | Default new regime | Old regime |
|---|---|---|
| FY 2025-26, AY 2026-27 | ₹4,00,000 | ₹2,50,000 |
| FY 2026-27, Tax Year 2026-27 | ₹4,00,000 | ₹2,50,000 |
The old regime applies where it is validly selected. Higher old-regime thresholds available to qualifying resident senior citizens do not automatically apply to non-resident individuals.
Income subject to special tax provisions, including particular categories of capital gains, requires separate examination. The ordinary slab threshold must not be applied mechanically to every kind of income.
The ₹12 lakh rebate threshold under the new regime is not an NRI filing exemption. The relevant rebate is restricted to eligible resident individuals. Even for a person otherwise eligible for a rebate, the absence of final tax payable does not by itself determine whether filing is compulsory.
Can an NRI be required to file below the exemption limit?
Yes.
Additional statutory filing conditions can apply even when the ordinary income threshold is not exceeded.
The relevant prescribed conditions include:
| Condition | Filing trigger |
|---|---|
| Aggregate deposits in one or more current accounts maintained with the specified banking institutions | Exceeding ₹1 crore |
| Specified expenditure on travel to a foreign country for oneself or another person | Exceeding ₹2 lakh |
| Expenditure towards electricity consumption | Exceeding ₹1 lakh |
| Business sales, turnover or gross receipts | Exceeding ₹60 lakh |
| Professional gross receipts | Exceeding ₹10 lakh |
| Aggregate tax deducted and collected at source | ₹25,000 or more |
| Aggregate deposits in one or more savings bank accounts covered by the prescribed provision | ₹50 lakh or more |
These conditions appear under the relevant provisions of section 139(1) and Rule 12AB for FY 2025-26, and section 263(1)(a)(x) and Rule 163 for Tax Year 2026-27.
The higher ₹50,000 TDS/TCS filing threshold applies to qualifying resident individuals aged 60 or above. A non-resident does not qualify merely because they are a senior citizen.
The wording of each threshold matters. For example, aggregate TDS/TCS of exactly ₹25,000 meets that condition, while the current-account trigger requires deposits exceeding ₹1 crore.
The foreign-travel condition excludes travel to neighbouring countries and notified pilgrimage destinations as provided by the applicable rule.
The bank-account conditions should be assessed within their statutory scope, not automatically extended to every account maintained outside India.
Crossing a prescribed transaction threshold does not mean the entire deposit or expenditure is taxable income. These are additional filing conditions.
Where an express statutory non-filing exemption is available, its conditions must also be examined.
Does an NRI have to file if TDS has already been deducted?
TDS and return filing are separate obligations.
A bank, tenant, company or property buyer may deduct Indian tax when making a payment to a non-resident.
That withholding does not automatically establish the final tax liability or remove the filing requirement.
There are three common outcomes:
- A return is compulsory under the ordinary or additional statutory filing provisions.
- A specific non-filing exception applies because the income and withholding satisfy its conditions.
- The individual needs to file to claim a refund of excess tax deducted.
Example: ₹30,000 Indian TDS on income below ₹4 lakh
Assume that, during Tax Year 2026-27, an NRI earns ₹2 lakh of ordinary NRO bank interest and aggregate Indian TDS is ₹30,000. Assume no other income or facts that materially change the example.
Although the income is below the ordinary ₹4 lakh new-regime threshold, aggregate TDS exceeds the ₹25,000 prescribed filing trigger.
Ordinary NRO interest does not automatically qualify for the special investment-income non-filing exemption under section 216.
The additional filing requirement must therefore be considered. If no relevant statutory non-filing exemption applies, filing may be compulsory despite the relatively small amount of income.
This example does not establish whether ₹30,000 was the correct withholding amount or what the final tax liability should be.
The controlling distinction is that income below the ordinary threshold does not necessarily mean filing is unnecessary.
Is interest on NRO, NRE and FCNR(B) accounts treated the same?
No.
Ordinary NRO account interest is generally taxable in India, subject to applicable domestic law and treaty provisions.
Interest on an eligible NRE account may be excluded from Indian total income under section 10(4)(ii) of the 1961 Act or Schedule IV, item 1, of the 2025 Act. Eligibility depends on the relevant FEMA residence or RBI permission conditions.
Interest on qualifying FCNR(B) foreign-currency deposits may also be exempt in India where the conditions of section 10(15)(iv)(fa) of the 1961 Act are met. Schedule IV, item 14, of the 2025 Act preserves that specified exemption subject to its conditions.
The account classification and the statutory exemption are distinct. In particular, a change in residence can affect the continuing eligibility for these banking arrangements and tax exemptions.
Exempt bank interest does not, merely by being exempt, establish whether some other income or statutory condition creates an ITR filing obligation.
When is an NRI exempt from filing an Indian ITR?
Indian law contains specific non-filing exceptions for certain non-resident income.
These are limited provisions, not a blanket rule that TDS automatically removes the filing obligation.
Section 115G and section 216: qualifying NRI investment income
Under section 115G of the Income-tax Act, 1961, a qualifying non-resident Indian need not furnish a return under section 139(1) where:
- Their total income consists only of the defined investment income, long-term capital gains or both; and
- Tax deductible under the prescribed TDS provisions has been deducted from that income.
Section 216 of the Income-tax Act, 2025 contains the corresponding non-filing exception.
The definition of non-resident Indian is important here.
Section 115C of the 1961 Act and section 212 of the 2025 Act require the person to be a non-resident individual who is an Indian citizen or a qualifying person of Indian origin.
Being a foreign citizen, holding an OCI card or simply being classified as non-resident does not automatically prove eligibility under this definition.
The investment must also qualify as a specified foreign-exchange asset. The legislation defines these assets and the relevant income categories. Eligible assets may include specified Indian-company shares, qualifying debentures, specified company deposits and Government securities acquired using convertible foreign exchange.
An ordinary NRO deposit or any mutual fund investment should not automatically be placed within this regime.
The entirety of the relevant total income and the prescribed TDS condition must be considered before relying on the non-filing provision.
Other statutory non-filing exceptions
The law provides additional exceptions for particular income categories:
| Income qualifying for consideration | 1961 Act | 2025 Act |
|---|---|---|
| Certain specified dividends, interest, royalty and fees for technical services | Section 115A(5) | Section 207(8) |
| Certain qualifying foreign-currency bond interest and Global Depository Receipt dividends | Section 115AC(4) | Section 209(4) |
| Specified investment income and long-term capital gains of qualifying NRIs | Section 115G | Section 216 |
| Certain income of specified non-resident sportspersons, sports bodies and entertainers | Section 115BBA(2) | Section 211(3) |
Every exception has conditions concerning the taxpayer, nature of income, composition of total income and deduction of tax.
For example, section 209(4) concerns qualifying interest and dividend income falling within entries 1 and 2 of section 209(1). Although section 209 also addresses capital gains on those instruments, the capital-gains category is not included in that particular non-filing exemption.
Likewise, the sports and entertainment exception is limited to the persons and income specified by law. It is not a general exemption for Indian citizens working overseas.
What if tax was deducted at a lower treaty rate?
A lower rate under an applicable Double Taxation Avoidance Agreement (DTAA) may be lawful for a particular income payment.
That does not automatically satisfy every domestic non-filing exemption.
For example, section 207(8) of the Income-tax Act, 2025 requires tax to have been deducted at a rate not lower than the rates specified in that section.
If withholding is made at a lower treaty rate, the statutory condition for that non-filing exception must be examined separately.
Other exemptions use their own language. They should not all be treated as having precisely the same minimum-rate requirement.
The important distinction is between treaty entitlement, correct withholding and eligibility not to file a return.
What if an NRI has no Indian income?
An individual who is actually non-resident under Indian income-tax law, has no income chargeable in India and meets no independent statutory filing condition will generally not be required to file merely because they hold an Indian passport, PAN, bank account or property.
However, the absence of Indian income must be established correctly.
Interest, rent, dividends, capital gains and other income from India may create a different result.
Further, the first receipt of income and the later movement of funds are different events. Money initially received outside India and subsequently remitted into India is not automatically taxable merely because of the remittance.
Similarly, income first received in India cannot automatically be treated as a foreign remittance solely because the payer is overseas.
The bank account into which money is credited does not, by itself, establish whether the income is chargeable in India or whether an ITR must be filed.
Does selling Indian property require an NRI to file ITR?
An NRI selling property in India must examine the resulting capital gains, applicable statutory relief, withholding and filing conditions.
The gross sale consideration is not automatically the taxable capital gain.
The buyer’s withholding obligation is also different from the seller’s final tax liability. A substantial amount may be deducted from the payment even where the seller’s properly computed liability is lower.
The return-filing test must consider the applicable gain, other income, statutory conditions and any available non-filing exception.
Where reinvestment or other capital-gains relief is claimed, the ordinary filing threshold must be assessed without giving effect to specified deductions or relief provisions where the relevant statute requires that approach.
Claiming a capital-gains exemption does not itself establish that no return is required.
Finally, outward remittance of the sale proceeds is governed separately by FEMA, RBI directions and banking requirements. Filing an Indian ITR does not automatically establish permission to repatriate the proceeds.
When should an NRI file even if filing is not otherwise compulsory?
A return may be needed to obtain or preserve a particular statutory claim.
To claim an Indian tax refund
If tax deducted or otherwise paid exceeds the final amount properly chargeable, a refund may be available.
Section 239(1) of the 1961 Act and section 433 of the 2025 Act provide for refund claims through the applicable return framework.
An NRI should reconcile Form 26AS, AIS, TDS certificates and the underlying income before making the claim.
To carry forward an eligible loss
An eligible business or capital loss may require timely return filing if it is to be carried forward.
Section 139(3) of the 1961 Act and section 263(1)(a)(viii) of the 2025 Act address the relevant loss-return framework.
Different losses can have different carry-forward conditions. The due date should not be assumed to be irrelevant merely because no tax is payable.
To claim treaty or other statutory treatment
A treaty may affect Indian tax liability, but it does not automatically eliminate domestic procedural requirements.
The income category, applicable treaty, residence documents and withholding position must be checked.
Where claiming a refund or another available benefit requires a return, treaty entitlement alone does not dispense with that step.
Which Income-tax Act applies to the return?
The governing law depends on the income period, not merely the calendar date on which the return is submitted.
| Question | FY 2025-26 | FY 2026-27 |
|---|---|---|
| Return year | AY 2026-27 | Tax Year 2026-27 |
| Applicable law | Income-tax Act, 1961 | Income-tax Act, 2025 |
| General filing provision | Section 139 | Section 263 |
| Specified NRI investment-income non-filing exception | Section 115G | Section 216 |
| Ordinary return-filing year | 2026 | 2027 |
A return for income earned between 1 April 2025 and 31 March 2026 remains governed by the 1961 Act even though it may be filed after 1 April 2026.
The 2025 Act applies to Tax Year 2026-27, subject to its commencement, transitional and saving provisions.
Which ITR form should an NRI use?
For a non-resident individual without income chargeable under the head Profits and gains of business or profession, ITR-2 is ordinarily the relevant form, subject to the prescribed eligibility conditions.
ITR-3 may apply where the person has business or professional income.
ITR-1 and ITR-4 have resident-status restrictions and are not the ordinary forms for non-resident individuals.
The standard process involves determining the correct tax period and residential status, classifying income, establishing the filing requirement, choosing the eligible ITR form, reconciling tax credits, furnishing the return and completing the prescribed verification.
Indian ITR filing is generally attachment-free, although underlying evidence must be preserved and separately prescribed reports or statements may be required.
What are the relevant filing deadlines?
As at 19 October 2026, the position for AY 2026-27 includes:
- 31 July 2026: Ordinary due date for most non-audit individuals without business or professional income.
- 31 August 2026: Due date for specified non-audit business or professional cases.
- 21 November 2026: Extended due date for the specified audit-category persons covered by the CBDT announcement of 28 September 2026.
- 31 December 2026: Generally the last date for a belated AY 2026-27 return, subject to the relevant statutory conditions.
The 21 November extension does not automatically apply to every NRI.
For Tax Year 2026-27, the ordinary return-filing cycle falls in 2027. Under the amended 2025 Act, the relevant statutory category determines whether the ordinary due date is 31 July, 31 August, 31 October or another applicable date.
A deadline must be checked against the person’s exact filing category and any subsequent CBDT extension.
What happens if a required ITR is not filed?
Failure to file a return that is legally compulsory can lead to late-filing fees, interest, loss of particular claims, notices and other consequences under the relevant Act.
For AY 2026-27, section 234F of the 1961 Act provides the late-filing fee framework.
For Tax Year 2026-27, section 428 of the 2025 Act provides the corresponding fee framework.
Subject to statutory conditions, the late-filing fee is generally ₹1,000 where total income does not exceed ₹5 lakh and ₹5,000 in other cases.
A belated return, revised return and updated return serve different purposes and have different restrictions. An updated return is not an unrestricted route to claim a missed refund or loss.
Equally, a person who actually has no statutory obligation to file should not be treated as being in default merely because no Indian ITR was furnished.
How should an NRI decide whether filing is compulsory?
Start with the facts and the legal period.
A passport and travel records help establish residence. Bank and investment statements identify income and transactions. Form 26AS and TDS certificates establish tax deducted. Property documents help identify ownership and sale proceeds.
None of these documents, taken alone, determines the filing obligation.
For an Indian ITR, that means testing the filing obligation under income-tax law rather than assuming that a banking transaction, tax deduction or overseas-resident label supplies the answer.
A complete general filing decision requires the relevant year, income-tax residence, chargeable income, statutory thresholds, additional filing conditions and any specific exemption.
Indian tax liability, Indian tax deducted and the obligation to file an Indian income-tax return are three different legal questions.
Official sources
- Income-tax Act, 1961, sections 139, 115A, 115AC, 115BBA, 115C and 115G, read with amendments operative for AY 2026-27.
- Income-tax Act, 2025, as amended by Finance Act, 2026, particularly sections 207, 209, 211, 212, 216, 263, 428 and 433 and Schedule IV.
- Income-tax Rules, 2026, notified 20 March 2026, particularly Rules 163 and 164.
- Income Tax Department e-Filing Portal, for filing procedures, forms and applicable updates.
- Ministry of Finance announcement, 28 September 2026, concerning the specified AY 2026-27 audit-category extension.
Scope: This article provides general educational information on Indian income-tax law based on material reviewed as at 19 October 2026. Individual filing obligations depend on the applicable tax year, residential status, income and statutory conditions. The law and filing deadlines may change. This article does not determine an individual’s tax liability or return-filing eligibility. USA, UK, UAE and other foreign-country taxation and reporting remain separate matters under those countries’ laws and require review by appropriately qualified professionals there.
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