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NRI ITR-2 Filing Guide 2026 — Complete Step-by-Step for FY 2025-26
If you are a Non-Resident Indian (NRI) with income from India — rental income, interest on NRO accounts, capital gains from property or shares, or any other Indian source — you are required to file an Income Tax Return in India for FY 2025-26 (Assessment Year 2026-27). The deadline is July 31, 2026.
This guide covers overall NRI ITR-2 filing across all income types. If your only Indian income is rental income and you want a guide focused specifically on TDS, DTAA, and repatriation for rental property, see our companion guide, NRI Rental Income Tax India 2026 — TDS, ITR & DTAA Guide.
This guide covers everything you need to know — which ITR form to use, what income to declare, how to claim DTAA benefits, and how to avoid the most common mistakes NRIs make when filing.
Who Must File ITR as an NRI in 2026?
As an NRI, you must file an Indian Income Tax Return if any of the following apply:
- Your total income from Indian sources exceeds ₹2.5 lakh (old regime) or ₹4 lakh (new regime) in FY 2025-26
- You have capital gains from sale of property or shares in India — regardless of amount
- TDS has been deducted on your Indian income and you want to claim a refund
- You have income from a business or profession in India
- If you are resident and ordinarily resident, foreign assets may create separate reporting obligations; this is not a Schedule FA trigger for a non-resident
- You want to carry forward capital losses to offset against future gains
Even if your Indian income is below the exemption limit, filing an ITR is the only way to claim a refund of TDS that has been deducted at source — for example, 30% TDS on NRO account interest.
Which ITR Form Do NRIs Use?
| ITR Form | When to Use | NRI Applicable? |
|---|---|---|
| ITR-1 (Sahaj) | Salary + one house property + other income | NO — NRIs cannot use ITR-1 |
| ITR-2 | Salary, house property, capital gains, foreign income/assets | YES — Most NRIs use this |
| ITR-3 | Business or professional income in India | YES — if NRI has Indian business income |
| ITR-4 (Sugam) | Presumptive income from business | NO — NRIs cannot use ITR-4 |
The answer for most NRIs is ITR-2. Use ITR-3 only if you run a business or practice in India. Never use ITR-1 or ITR-4 as an NRI — your return will be defective.
What Income Do NRIs Declare in ITR-2?
Taxable Indian Income for NRIs
| Income Type | Taxability | TDS Rate |
|---|---|---|
| NRO account interest | Fully taxable at slab rates | 30% + surcharge + cess |
| NRE account interest | Fully EXEMPT | No TDS |
| FCNR account interest | Fully EXEMPT | No TDS |
| Rental income from Indian property | Taxable after 30% standard deduction | 30% by tenant (Section 195) |
| Long term capital gains — property | 12.5% for relevant transfers on or after 23 July 2024; no indexation for non-residents, subject to applicable exemptions | 12.5% on sale value |
| Short term capital gains — property | Taxable at slab rates | 30% on sale value |
| Long term capital gains — listed shares | 12.5% above ₹1.25 lakh | Broker deducts |
| Short term capital gains — listed shares | 20% (STT paid transactions) | Broker deducts |
| Dividends from Indian companies | Taxable at slab rates | 20% TDS |
| Foreign salary / income | NOT taxable in India for NRIs | No TDS |
How to Determine Your Residential Status for FY 2025-26
For FY 2025-26, determine residence under section 6 of the Income-tax Act, 1961. Fewer than 182 days in India does not automatically establish non-residence: the 60-day plus 365-day test, citizenship/visit exceptions and deemed-residence rules may also matter.
Deemed residence for an Indian citizen with income above ₹15 lakh, excluding income from foreign sources, depends on not being liable to tax elsewhere by reason of residence, domicile or a similar criterion. It does not follow simply from paying no tax in a particular country.
Three Residential Categories
| Status | Condition | What is taxable in India |
|---|---|---|
| NRI | Does not meet the applicable resident or deemed-resident tests | Only Indian-source income |
| RNOR | Resident who satisfies an RNOR condition under section 6 | Indian income + certain foreign income |
| Resident (ROR) | Resident who does not qualify as RNOR | Global income — including foreign salary |
Important: Count your days carefully using passport stamps and airline records. Even a small error can change your tax status and significantly increase your tax liability.
Step-by-Step — How to File ITR-2 as an NRI for FY 2025-26
Step 1 — Gather All Required Documents
- PAN card
- PAN and appropriate portal verification details; PAN–Aadhaar linkage is not compulsory for an individual who qualifies as non-resident under the notified exemption
- Form 26AS / AIS / TIS from the Income Tax portal — shows all TDS deducted against your PAN
- Bank statements for all NRO accounts
- Form 16A from banks (TDS certificate for NRO interest)
- Rental income details — rent receipts, municipal tax paid
- Sale deed and purchase deed if property was sold during the year
- Broker contract notes for share transactions
- Tax Residency Certificate (TRC) from your country of residence — for DTAA claims
- Form 10F — filed electronically on the Income Tax portal
Step 2 — Download and Reconcile Form 26AS
Log into the Income Tax portal at incometax.gov.in → My Account → Form 26AS. This document shows every TDS deduction against your PAN. Your ITR must match Form 26AS exactly — any mismatch triggers a notice.
Also check AIS (Annual Information Statement) which shows all financial transactions reported against your PAN including property purchases, large bank credits, and share transactions.
Step 3 — Choose Between Old and New Tax Regime
| Feature | Old Regime | New Regime (Default) |
|---|---|---|
| Basic exemption | ₹2.5 lakh | ₹4 lakh |
| Section 80C deductions | Available (up to ₹1.5 lakh) | Not available |
| Home loan interest (Section 24) | Available | Limited |
| Tax rates | Higher slabs | Lower slabs |
| Best for NRIs when | High deductions available | Simple income, few deductions |
Note for NRIs: The tax rebate under Section 87A is NOT available to NRIs. Only resident individuals can claim this rebate. This is one of the most common errors in NRI returns.
Step 4 — Claim DTAA Benefits (Critical Step)
If your country of residence has a Double Taxation Avoidance Agreement (DTAA) with India, you may be entitled to a lower TDS rate or a foreign tax credit. To claim DTAA benefits you must:
- Obtain a Tax Residency Certificate (TRC) from your country’s tax authority
- File Form 10F electronically on the Income Tax portal
- Submit both documents to the payer (bank, tenant, company) before income is paid
- Use the applicable income schedules for a treaty claim; Schedule TR is not a generic treaty-rate schedule for every non-resident
DTAA benefit by country for NRO interest:
| Country | Standard TDS | DTAA Rate on Interest | Saving |
|---|---|---|---|
| 🇦🇪 UAE | 30% | 12.5% | 17.5% saving |
| 🇺🇸 USA | 30% | 15% | 15% saving |
| 🇬🇧 UK | 30% | 15% | 15% saving |
| 🇦🇺 Australia | 30% | 15% | 15% saving |
| 🇨🇦 Canada | 30% | 15% | 15% saving |
| 🇸🇬 Singapore | 30% | 15% | 15% saving |
Step 5 — Check Whether Schedule FA Applies
Schedule FA need not be completed by a non-resident or a resident but not ordinarily resident (RNOR). For a resident and ordinarily resident taxpayer, foreign-asset reporting must be assessed under the applicable ITR instructions. There is no ₹1 crore Indian-asset threshold that makes Schedule FA mandatory for an NRI.
Do not confuse Schedule FA with Schedule AL, which concerns assets and liabilities and has separate applicability rules. A foreign-asset penalty should not be presented as automatic for every NRI holding an overseas account.
Source: Income Tax Department — ITR-2 user manual, Schedule FA. Checked 14 October 2026.
Step 6 — File ITR-2 on the Income Tax Portal
- Log in to incometax.gov.in
- Go to e-File → Income Tax Returns → File Income Tax Return
- Select Assessment Year 2026-27
- Select ITR-2
- Choose filing mode — online (recommended) or offline (download utility)
- Fill in all schedules — Schedule HP (house property), Schedule CG (capital gains), Schedule OS (other sources), applicable treaty-relief schedules; Schedule FA only where residential status requires it
- Compute tax and verify the amount matches your expectation
- Submit and e-verify within 30 days
Step 7 — E-Verify the Return
Filing the ITR is not complete until you e-verify it. An unverified ITR is treated as if it was never filed. E-verification options:
- Aadhaar OTP (fastest — instant verification)
- Net banking (login to your bank → e-verify)
- Bank account EVC (electronic verification code)
- DSC (Digital Signature Certificate)
E-verify within 30 days of filing. Missing this deadline means the return is invalid and you must refile.
Key Deadlines for FY 2025-26 (AY 2026-27)
| Event | Deadline |
|---|---|
| Regular ITR filing deadline | July 31, 2026 |
| Belated ITR (with penalty) | December 31, 2026 |
| Updated ITR (ITR-U) with additional tax | Within 48 months from the end of the relevant assessment year, subject to eligibility and additional tax |
| E-verification after filing | Within 30 days of filing |
Penalties for Late Filing
| Income level | Late filing penalty |
|---|---|
| Total income up to ₹5 lakh | ₹1,000 |
| Total income above ₹5 lakh | ₹5,000 |
| Interest on tax due (Section 234A) | 1% per month on tax payable |
Most Common NRI ITR-2 Mistakes
Mistake 1 — Using ITR-1 instead of ITR-2
NRIs cannot use ITR-1. If you file ITR-1 as an NRI, the return is defective and you will receive a notice. Always use ITR-2.
Mistake 2 — Not declaring NRO account interest
Many NRIs believe NRO interest is “already taxed via TDS so no need to declare.” This is wrong. You must declare the income in your ITR — TDS is just advance tax. The return is how you reconcile actual liability vs TDS paid.
Mistake 3 — Claiming Section 87A rebate
NRIs are NOT eligible for the Section 87A rebate of up to ₹12,500 (old regime) or ₹60,000 (new regime for income up to ₹12 lakh). Claiming this incorrectly will generate a demand notice.
Mistake 4 — Not filing Form 10F before DTAA claim
You cannot claim DTAA benefit in your ITR without having first filed Form 10F electronically. Retrospective filing is not accepted. File Form 10F at the start of every financial year.
Mistake 5 — Wrong residential status
Declaring yourself as “Resident” when you are an NRI means your foreign income becomes taxable in India. Always determine residential status before filing and count days precisely.
Mistake 6 — Not reconciling with Form 26AS before filing
If your declared income does not match Form 26AS, the Income Tax Department’s system automatically generates a mismatch notice. Always download and reconcile Form 26AS before filing.
Mistake 7 — Not e-verifying within 30 days
A filed but unverified ITR is treated as invalid. The deadline for e-verification is 30 days from the date of filing. Many NRIs forget this step.
Mistake 8 — Applying Schedule FA without checking residential status
Non-residents and RNOR taxpayers need not complete Schedule FA. Residents and ordinarily resident taxpayers should check the applicable foreign-asset reporting instructions.
Frequently Asked Questions — NRI ITR-2 Filing 2026
Q: I am an NRI in UAE. Is my salary taxable in India?
No. Salary earned for services performed outside India is not taxable in India for an NRI. Only income sourced from India — like NRO interest, rental income, or capital gains on Indian property — is taxable.
Q: I have only NRO account interest income of ₹1.8 lakh. Do I need to file ITR?
If your income is below ₹2.5 lakh (old regime) or ₹4 lakh (new regime), you are not required to file. However, if TDS has been deducted at 30%, filing an ITR is the only way to claim a refund — which you should.
Q: Can I file ITR-2 from outside India?
Yes. ITR-2 is filed online on the Income Tax portal from anywhere in the world. You need portal access, your PAN, internet access and a valid verification method. Aadhaar OTP is one method; eligible bank EVC, net banking and DSC routes are alternatives.
Q: What if I missed the July 31 deadline?
You can file a belated return up to December 31, 2026 with a penalty of ₹1,000 (income up to ₹5 lakh) or ₹5,000 (income above ₹5 lakh). However you lose the ability to carry forward losses.
Q: My tenant deducted 30% TDS on rent but my actual tax slab is 20%. Can I get a refund?
Yes. File ITR-2 declaring the rental income, compute actual tax at 20%, and claim the excess TDS as a refund. Refunds are typically processed within 3-6 months of filing.
Q: I sold property in India this year. Which schedule in ITR-2 do I fill?
Declare the capital gain in Schedule CG (Capital Gains). For long-term gains, report the eligible cost and any applicable Section 54 or 54EC exemption. For a non-resident’s land/building transfer on or after 23 July 2024, the 12.5% computation does not allow indexation merely because the asset was purchased earlier.
Q: Do I need to show my NRE account balance in ITR-2?
An NRE account is an Indian bank account, not a foreign asset. Non-residents and RNOR taxpayers need not complete Schedule FA. Check exempt-income and any applicable asset-disclosure schedules separately.
Q: What documents does my CA need to file my ITR-2?
Form 26AS / AIS, bank statements for NRO accounts, Form 16A from banks, rental income details, property sale documents (if applicable), share transaction contract notes, TRC and Form 10F for DTAA claims, and passport copy for residential status verification.
Q: Can I revise my ITR-2 after filing if I made a mistake?
A revised return may be filed within the applicable statutory window and before completion of assessment. Check the current AY 2026-27 deadline and eligibility before submitting a correction.
Q: Is it compulsory to link Aadhaar with PAN for NRI ITR filing?
The Income Tax Department lists non-residents under the Income-tax Act, 1961 among the categories exempt from compulsory PAN–Aadhaar linkage. Confirm that your portal profile and status are correct.
NRI ITR-2 Filing — What We Handle
Our team handles complete ITR-2 filing for NRIs — residential status determination, income computation, DTAA analysis, applicable reporting schedules, treaty documentation, and e-verification. Every return is reviewed by an ICAI-registered Fellow Chartered Accountant.
- ✓ All NRI income types — NRO interest, rental income, capital gains, dividends
- ✓ DTAA benefit claims for USA, UK, UAE, Australia, Canada, Singapore
- ✓ Foreign tax credit computation
- ✓ Residential status and applicable asset-reporting review
- ✓ Complete reconciliation with Form 26AS / AIS before filing
- ✓ E-filing and e-verification included
- ✓ Written confirmation of every step
| Service | Price |
|---|---|
| NRI ITR-2 — Basic (interest + rental income) | Starting ₹3,499 |
| NRI ITR-2 — With capital gains | Starting ₹4,999 |
| NRI ITR-2 — With property sale + repatriation | Starting ₹6,999 |
| Form 145 + 146 + ITR-2 complete package | Starting ₹6,999 |
NRI ITR filing — confirm your filing route and applicable deadline
Email us at hello@nritaxca.com — fixed quote within 2 hours.
Start Your ITR Filing →
Targeted factual corrections checked on 14 October 2026. The return for FY 2025-26 (AY 2026-27) is governed by the Income-tax Act, 1961; the new Act applies to tax years beginning from 1 April 2026. Consult a qualified Chartered Accountant for advice specific to your situation.
Focus keyphrase: NRI income tax return India
Before filing ITR-2, use our free NRI tax calculator to estimate your tax liability, TDS credit and refund amount. Our CA team can file your ITR-2 — get started here.
Use our free NRI Tax Calculator to instantly estimate your property TDS, refund amount and ITR obligation → Calculate Now
Missed Schedule FA in an earlier return? Residents and returned NRIs who did not report foreign assets can use the one-time FAST-DS 2026 disclosure scheme until 31 December 2026. Read our FAST-DS 2026 guide.