If you are a non-resident Indian with income in India, the Indian return for FY 2025-26 (assessment year 2026-27) is still filed under the old Income-tax Act, 1961, even though the new Income-tax Act, 2025 took over from 1 April 2026. This guide covers that return first: who must file, which form, the deadlines that are left, and how to get back excess TDS. It then sets out what changes for tax year 2026-27, which you will file in 2027, and the treaty basics for NRIs in the US, UK, Singapore and the UAE.
Step 1: Confirm you are actually a non-resident
Tax residency in India depends on the days you spend in India during the financial year (April to March), not the days you spend abroad. You are resident if either test is met:
- you were in India for 182 days or more in the year; or
- you were in India for 60 days or more in the year and 365 days or more in the four years before it.
Two adjustments matter for most NRIs. For an Indian citizen who leaves India for employment abroad, and for a citizen or person of Indian origin who is visiting India, the 60 days becomes 182 days. If that visitor's Indian income (excluding foreign income) is over ₹15 lakh, the 60 days becomes 120 days instead, and someone caught by this 120-day rule is treated as resident but not ordinarily resident (RNOR).
There is also a deemed residency rule for Indian citizens only: if your Indian income is over ₹15 lakh and you are not liable to tax in any other country because of your residence or domicile, you are treated as resident. A deemed resident is RNOR, so foreign income still stays out of Indian tax. This matters most for people in no-tax countries such as the UAE. Our NRI residential status calculator runs these tests for you, and the RNOR guide covers the returning-NRI case.
Step 2: Do you have to file?
An NRI must file an Indian return for FY 2025-26 if any of these apply:
- Total Indian income is above the basic exemption limit of the regime you use: ₹4 lakh under the default new regime, or ₹2.5 lakh under the old regime.
- You want a refund of TDS that was deducted at a higher rate than you actually owe. This is the most common reason NRIs file.
- You have tax to pay that TDS did not fully cover.
Two points catch NRIs out. First, the section 87A rebate that makes income up to ₹12 lakh tax-free under the new regime is for residents only, so an NRI with ₹6 lakh of Indian income still owes tax. Second, NRIs cannot set the basic exemption limit against capital gains taxed at special rates (equity short-term gains at 20%, long-term gains at 12.5%). Tax can be due on a modest gain even when the rest of your income is small.
There is no rule that every capital gain forces a return "regardless of amount", and holding signing authority over a foreign bank account is not a filing trigger for NRIs. The foreign-asset rules apply to residents.
Step 3: Pick the right form
| Your Indian income | Form for FY 2025-26 |
|---|---|
| Rent, interest, dividends, capital gains, salary (no business income) | ITR-2 |
| Any business or professional income in India | ITR-3 |
ITR-1 is not available to non-residents. In ITR-2, exempt income such as NRE and FCNR interest goes in the exempt-income schedule (Schedule EI); it is reported, not taxed. If your total income is above ₹1 crore, you must also fill Schedule AL, the statement of assets and liabilities in India as on 31 March 2026. The threshold was ₹50 lakh in earlier years.
Step 4: Know the deadlines for FY 2025-26
| Return | Due date | Status on 2 Oct 2026 |
|---|---|---|
| ITR-2 (most NRIs) | 31 July 2026 | Passed |
| ITR-3, no tax audit | 31 August 2026 | Passed |
| Tax-audit cases | 21 November 2026 (extended from 31 October) | Open |
| Belated return | 31 December 2026 | Open |
| Revised return | 31 March 2027 | Open |
| Updated return (ITR-U) | Up to 48 months from the end of the assessment year | Open |
The audit-case extension to 21 November comes from CBDT Circular No. 07/2026 dated 28 September 2026. It does not cover ITR-2.
If you missed 31 July, file a belated return before 31 December 2026. The late fee under section 234F is a flat ₹5,000, or ₹1,000 if your total income is ₹5 lakh or less. There is no higher slab after 31 December. A belated return also loses the right to carry forward capital losses (house-property loss is the exception), and interest under section 234A runs on any unpaid tax. Refunds are still allowed on a belated return.
Step 5: Reclaim excess TDS
Most NRI tax is collected through TDS, and it is often deducted at a higher rate than you finally owe. The default rates for NRIs are:
| Income | Basic TDS rate |
|---|---|
| Equity short-term capital gains | 20% |
| Long-term capital gains (all types) | 12.5% |
| NRO interest, rent, other short-term gains, other income | 30% |
Surcharge is added on top: nil up to ₹50 lakh of income, 10% above ₹50 lakh, 15% above ₹1 crore, and capped at 15% for capital gains. Then 4% cess. So a tenant paying rent to an NRI deducts 31.2% (30% plus cess) of the gross rent.
Common reasons NRIs are over-deducted, all of which you recover only by filing:
- A broker or bank applies a flat 15% surcharge even though your income is below ₹50 lakh.
- Long-term equity gains get no credit for the ₹1.25 lakh yearly exemption at the TDS stage.
- Capital losses you could set off are ignored at the TDS stage.
- A treaty rate lower than 30% applies to your NRO interest, but you did not give the bank your TRC in time.
Property is the big one. When an NRI sells Indian property held long term, the buyer must deduct 12.5% plus surcharge and cess, about 13% to 14.95% of the sale price, not just the gain. If your actual tax is lower, either apply for a lower-deduction certificate before the sale or claim a refund in your return. See selling property in India as an NRI and the NRI property sale calculator.
To receive a refund, pre-validate an Indian bank account (usually your NRO account) on the e-filing portal before you file.
Step 6: Claim treaty (DTAA) relief
A Double Taxation Avoidance Agreement can cap the Indian tax on some income, and your country of residence usually gives credit for Indian tax. For FY 2025-26 you need:
- a Tax Residency Certificate (TRC) from your country's tax authority for the relevant period; and
- Form 10F, filed online on the Indian e-filing portal, giving the details the TRC does not.
Give both to your Indian bank or payer before the payment if you want the lower rate applied at source. Otherwise claim the difference as a refund in your return.
From 1 April 2026 the forms are renumbered under the new Act: Form 10F becomes Form 41, and the treaty provision moves from section 90 to section 159. Use the new forms for income earned in tax year 2026-27.
Country notes
United States
- Interest (Article 11): Indian tax capped at 15% (10% for loans by banks). This lowers NRO interest TDS from 30% if you provide the TRC and Form 10F. The US TRC is IRS Form 6166, applied for on Form 8802.
- Dividends (Article 10): capped at 25%, or 15% for a company holding at least 10%. The domestic NRI rate of 20% plus surcharge and cess is already lower for individuals, so the treaty does not help here.
- Capital gains (Article 13): each country taxes under its own law. India taxes your Indian gains; the US gives a foreign tax credit (Form 1116).
- Indian mutual funds are generally treated as PFICs for US tax. That is a US filing issue (Form 8621), separate from your Indian return. See the PFIC guide and the full India-US DTAA guide.
United Kingdom
- The UK abolished domicile-based (remittance-basis) taxation from 6 April 2025. It now uses a residence-based test, with Foreign Income and Gains (FIG) relief for eligible new arrivals. UK residents outside that relief are taxed on worldwide income, including Indian income.
- Interest (Article 12): Indian tax capped at 15%.
- Capital gains (Article 14): each country taxes under its domestic law; the UK credits Indian tax under Article 24.
- The TRC is an HMRC certificate of residence.
Singapore
- Dividends (Article 10) and interest (Article 11): Indian tax capped at 15% for individuals. On dividends this is below the domestic 20% NRI rate, so the treaty does help.
- Capital gains: shares of Indian companies bought on or after 1 April 2017 can be taxed in India. For mutual fund units, the Mumbai bench of the Income Tax Appellate Tribunal held in Anushka Sanjay Shah v ITO (March 2025) that gains of a Singapore resident fall under Article 13(5) and are taxable only in Singapore, because units are not shares. This is a tribunal ruling, not settled law. Claiming it needs a TRC, full disclosure in the return, and readiness to defend it.
- The TRC is an IRAS certificate of residence.
United Arab Emirates
- The UAE has no personal income tax, so there is no foreign tax credit to claim at home. Indian tax is the full cost.
- Check the deemed-residency rule in Step 1 if your Indian income is over ₹15 lakh.
- Capital gains: the Cochin bench of the Tribunal held in DCIT v K.E. Faizal (2019) that a UAE resident's gains on mutual fund units fall under Article 13(5) and are not taxable in India. As with Singapore, this is litigable, and it needs a TRC from the UAE Federal Tax Authority and full disclosure.
- Check the treaty text for the current dividend and interest caps before you rely on them.
What changes for tax year 2026-27
Income you earn from 1 April 2026 falls under the Income-tax Act, 2025. The rates above are unchanged by Finance Act 2026, but the labels change:
| Item | Old (FY 2025-26) | New (tax year 2026-27) |
|---|---|---|
| Residency | Section 6 | Section 6 |
| TDS on payments to non-residents | Section 195 | Section 393(2) |
| Treaty relief | Section 90 | Section 159 |
| Treaty self-declaration | Form 10F | Form 41 |
| Lower-deduction certificate | Form 13 | Form 128 |
| Remittance forms | Form 15CA / 15CB | Form 145 / 146 |
| Annual tax statement | Form 26AS | Form 168 |
The return for tax year 2026-27 is due in 2027 (31 July for most NRIs). If you plan to move money abroad, see how NRIs repatriate money from India.
Foreign-asset disclosure: residents only
Schedule FA, the foreign-asset schedule, is required only for residents who are ordinarily resident (ROR). NRIs and RNORs do not fill it. Once you return and become ROR, every foreign account, brokerage, retirement plan and property must be declared. Under the Black Money Act, non-disclosure can attract a ₹10 lakh penalty per year. From 1 October 2024 that penalty does not apply where the total value of foreign assets other than immovable property is ₹20 lakh or less.
Five mistakes to avoid
- Getting the day count backwards. Count days in India, not days abroad, and check the 182/120-day variants. Run the residential status calculator before you pick a form.
- Not filing because "TDS covers it". TDS is often too high. The return is how you get the excess back.
- Ignoring NRO interest. It is fully taxable. Only NRE and FCNR interest is exempt, and only while you are a non-resident under FEMA. The NRE vs NRO guide explains the difference.
- Assuming the ₹12 lakh rebate applies. It is for residents only.
- Claiming treaty relief without a TRC. Without the certificate and Form 10F (Form 41 from tax year 2026-27), the relief can be denied.
This guide explains the rules; it is not tax advice for your situation. Treaty claims, especially the Singapore and UAE mutual-fund positions, should be reviewed by a tax adviser.