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The most common NRI tax myth — "income below the exemption limit means no filing needed, any form works" — is wrong on both counts. Here's the form, the schedules, and the deadline that actually apply.
NRIs cannot file ITR-1 (Sahaj), regardless of how simple the income looks — even a single source of rental income or NRO interest requires ITR-2. Filing ITR-1 as an NRI results in a defective return notice. If you have business or professional income from India (consulting, freelancing with Indian clients), you'd file ITR-3 instead.
Total Indian income exceeds the basic exemption limit — ₹3 lakh for most NRIs in FY 2025-26.
You have any capital gains from selling property or shares in India — regardless of the amount, even if small.
TDS was deducted on your Indian income and you want to claim a refund for excess deduction.
You hold foreign assets or signing authority on foreign accounts, which triggers Schedule FA disclosure obligations even below the income threshold.
Even below the exemption threshold, filing is often worth doing anyway — it builds a clean compliance record, which matters when banks assess your documentation for repatriation or future property transactions.
| Schedule | What it covers |
|---|---|
| Schedule S | Salary income (only if India-sourced) |
| Schedule HP | House property — rental income minus 30% standard deduction and property tax |
| Schedule CG | Capital gains from Indian assets — property, shares, mutual funds |
| Schedule OS | Other income — NRO interest, dividends |
| Schedule FSI | Foreign source income — relevant mainly for RNOR/ROR status, not standard NRI |
| Schedule FA | Foreign assets — required once you're ROR, and for NRIs/RNORs with Indian assets above ₹1 crore |
| Schedule AL | Assets and liabilities — required if total income exceeds ₹50 lakh |
Missing or mismatched entries in these schedules — not the total tax owed — are what most commonly trigger a Section 143(1) intimation or scrutiny notice.
If TDS was deducted at the standard domestic rate but you're eligible for a lower treaty rate, filing is where you recover the difference. Attach your Tax Residency Certificate, confirm Form 10F/Form 41 was submitted, and let the return reconcile the excess as a refund. Form 67 (for foreign tax credit) generally isn't relevant for standard NRIs — it applies when you've become RNOR or ROR and your foreign income is also taxed in your country of residence, since as a plain NRI your Indian-source income isn't taxed twice to begin with.
The standard due date is 31 July following the end of the financial year. Missing it brings a late fee under Section 234F — ₹5,000, or ₹1,000 if total income is below ₹5 lakh — plus interest on any outstanding tax liability. If both the original and belated filing windows are missed entirely, an updated return (ITR-U) can still be filed within 48 months of the relevant assessment year, though with an additional tax ranging from 25% to 70% depending on how late.
For income earned in FY 2025-26 (the year you're filing now), computation still follows the Income Tax Act, 1961, and the familiar names apply — Form 26AS, Form 15CA/15CB. From Tax Year 2026-27 onward, under the Income Tax Act, 2025, these get renamed — Form 26AS becomes Form 168, 15CA becomes Form 145, and 15CB becomes Form 146. The substance stays the same; only the labels change, so don't be thrown off when they appear in next year's filing cycle.
1. Filing ITR-1 because income seems simple. ITR-1 isn't available to NRIs under any circumstances — this alone makes the return defective, regardless of how straightforward the income sources are.
2. Not updating residential status to "Non-Resident" on the portal. Leaving it as resident by default can result in your global income being assessed incorrectly, even if your actual sources are purely Indian.
3. Claiming DTAA benefit without a properly filed Form 10F/Form 41. Since electronic filing became mandatory, a paper declaration or missing form invalidates the treaty rate claim entirely, reverting you to the higher domestic rate.
Key Takeaway: Every NRI with Indian-source income files ITR-2 (or ITR-3 with business income) — never ITR-1 — and the schedules that actually matter are HP, CG, and OS for most NRIs, with FA relevant mainly once you cross ₹1 crore in Indian assets or become ROR. The 31 July deadline is firm, and getting the schedules right the first time avoids the notices that come from mismatches, not from the tax amount itself.
Not always — if you have any capital gains from Indian property or shares, or want to claim a TDS refund, filing is required regardless of whether your total income is below the exemption threshold.
NRE interest is exempt and doesn't need to be declared as income, but if your total Indian assets exceed ₹1 crore, the account itself may need disclosure under Schedule FA.
A belated return can still be filed with a late fee under Section 234F (₹5,000, or ₹1,000 if income is below ₹5 lakh) plus interest on outstanding tax — and if that window is also missed, ITR-U remains available for up to 48 months with a higher additional tax.
It's the tax credit statement showing all TDS deducted against your PAN — reconciling it against your bank statements and TDS certificates before filing prevents mismatches that would otherwise trigger a notice after processing.
Disclaimer: This article is for general educational purposes only and does not constitute personalized financial, investment, tax, or legal advice. Figures, rates, and rules mentioned may change over time — verify current details with an official source or a qualified professional before making financial decisions.