ITR for NRIs with income in India
A Non-Resident Indian (NRI) must file an ITR in India if they have taxable income arising or accruing in India — rental income from Indian property, capital gains on Indian assets, interest on Indian bank accounts (particularly NRO accounts), or business income from an Indian source — regardless of their tax residency status in their country of residence. NRIs typically use ITR-2 or ITR-3 depending on their income composition.
What counts as India-sourced income for an NRI
Rental income from property located in India, capital gains from sale of Indian shares, mutual funds, or property, interest earned on NRO (Non-Resident Ordinary) accounts, and any business or professional income with an Indian source, are all taxable in India for an NRI, regardless of where the individual is tax-resident.
TDS on NRI income is often higher
Banks and payers typically deduct TDS at higher rates on payments to NRIs compared to residents — for example, NRO account interest is subject to TDS at a flat rate significantly higher than the rate applied to a resident's savings account interest. Filing a return is frequently necessary simply to claim a refund of this excess TDS if the NRI's actual tax liability, after applicable exemptions and treaty benefits, is lower.
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Talk to a CA →Double Taxation Avoidance Agreements (DTAA)
India has DTAAs with many countries, which can reduce the applicable tax rate on certain types of India-sourced income for residents of the treaty country, or provide relief from double taxation on income taxed in both jurisdictions. Claiming DTAA benefits typically requires a Tax Residency Certificate (TRC) from the country of residence and Form 10F, filed along with the ITR.
Repatriation of funds and Form 15CA/15CB
When an NRI wants to repatriate funds from India — sale proceeds of property, matured investments, or accumulated NRO balances — the remittance typically requires a CA-certified Form 15CB and an online Form 15CA filing before the bank will process the outward transfer, similar to the compliance required when a foreign-owned Indian company repatriates funds.
Filing form and deadline
NRIs generally use ITR-2 (or ITR-3 if there's business income) and follow the same 31 July due date as resident individuals not subject to audit, unless their income triggers audit requirements. E-verification via Aadhaar OTP is not always available for NRIs without an Indian mobile number, making net banking or EVC-based verification methods more commonly used.
Do NRIs need to file an Indian ITR even if all their income is earned abroad?
No — if an NRI has no income arising or accruing in India (no Indian rental property, no Indian capital gains, no Indian bank interest above the basic exemption threshold, etc.), there is generally no obligation to file an Indian ITR. The filing requirement is triggered specifically by having taxable Indian-sourced income, not by NRI status itself.
This article is for general information only. For your specific situation, consult a practicing CA.
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