Guide for NRIs for filing FY25 income tax returns

With the ITR deadline for FY25 (AY26) set for 15 September 2025, NRIs should begin preparing well in advance.

Mint spoke to tax experts to learn what’s required this tax season, from documents to dos and don’ts.

Determining residency

To qualify as an NRI for income tax purposes under the Income Tax Act, you must have stayed in India for less than 182 days during the relevant fiscal year. Additionally, your stay in the country must be less than 60 days during that fiscal year or less than 365 days in total during the four preceding fiscal years. If you meet these conditions, you will be treated as an NRI for that fiscal year.

There is also a “deemed residency” rule. If you are an Indian citizen who earns more than ₹15 lakh from Indian sources in a fiscal year and are not liable to pay tax in any other country, you will be treated as a Resident but not ordinarily resident (RNOR), even if your physical presence in India does not meet the standard residency thresholds.

Your residency affects tax liability, Double Taxation Avoidance Agreement (DTAA) eligibility, and disclosure requirements. It’s important to track your travel using passport stamps or flight records, especially if your stay is near the threshold.

Documents required

The first step is to assess whether you qualify as a resident or non-resident for tax purposes. “You should carefully determine your residential status based on the number of days you stay in India and keep your passport handy as documentary proof,” explained Laxmi Ahirwar, director, P.R.Bhuta & Co.

Your residential status should be updated on the income tax portal accordingly.

Important identity documents include PAN card, passport (including immigration stamps), and visa or overseas residence proof. “Your registered email and mobile number on the portal should match your bank records to ensure smooth refund processing,” pointed out Ajay Vaswani, chartered accountant and NRI tax advisor.

Full-year bank statements from 1 April 2024 to 31 March 2025 for NRO, NRE, and Indian savings accounts should be collected. While interest from NRO accounts is taxable, interest from NRE and FCNR accounts is exempt under specific FEMA conditions. “Even if exempt, these incomes must be reported for consistency with AIS and TIS,” Ahirwar added.

The annual information statement (AIS) is a detailed record of your financial transactions as reported by banks, employers, mutual funds, and other entities to the income tax department. It includes income from salary, interest, dividends, securities transactions, and foreign remittances. The taxpayer information summary (TIS) is a simplified snapshot of this data, offering category-wise totals like salary, capital gains, or business income. It helps taxpayers cross-check figures easily while preparing their return.

For NRIs, reviewing AIS and TIS is essential. Any mismatch between your return and these records can raise compliance flags. If there are errors, you can submit a “disagreement” for specific entries directly on the income tax portal to clarify and avoid issues.

Other documents to keep include rent receipts, property tax payments, tenant details, sale and purchase deeds, capital gain reports, and investment proofs. To claim treaty relief under the DTAA, a tax residency certificate (TRC) and Form 10F are essential. “This is a mandatory pre-condition for claiming DTAA relief now that manual filing of Form 10F has been disabled,” Vaswani noted.

Dos and Don’ts

NRIs must use ITR-2 to file their returns. “ITR-1 is not applicable to NRIs under any circumstances,” said Vaswani.

Your PAN must be operative, and your bank account should be validated on the portal to avoid refund delays.

If your total income in India exceeds ₹1 crore, then disclosure of Indian assets and liabilities under Schedule AL becomes mandatory. On this, Ahirwar clarified, “There’s no need to disclose foreign assets—even if your income is above ₹1 crore.”

Ensure proper tax rates are applied. “Dividend income, for instance, is taxed at a flat 20% under Section 115A, unless a DTAA benefit is availed for a lower rate,” Vaswani explained.

Ahirwar also reminded that “Section 87A rebate is not applicable to an NRI, so compute tax accordingly.”

Things to keep in mind

When determining your tax residency, both arrival and departure days count as days spent in India. Ahirwar reiterated: “Both the day of arrival and the day of departure count as a day in India.”

Additionally, accurate income reporting is critical. “Don’t assume that if TDS is deducted and shown in Form 26AS, you’re in the clear. You still have to report that income,” Ahirwar clarified.

Vaswani also advised NRIs to regularly reconcile their income with AIS, TIS, and Form 26AS. “Reconcile income with AIS, TIS, and Form 26AS before filing. Any mismatch should be formally disagreed with on the portal.”

Another common error is assuming that filing is unnecessary when income is below the basic exemption limit. But failure to file, especially when Form 26AS or AIS reflects transactions, may lead to unnecessary scrutiny or compliance notices.