When is it Mandatory for an NRI to File an ITR in India?

• Conditions that make ITR filing compulsory for NRIs, PIOs, and OCIs
• Advantages of filing an ITR even when it is not mandatory

The following content is intended solely for informational purposes and should not be treated as professional advice. Please note that these detailed articles are best viewed on larger screens, such as laptops, desktops, and tablets. The information in this article has been updated as of March 15, 2025, based on the Union Budget 2025-2026 announcements.

All Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) are advised to file an Income Tax Return (ITR) if they earn taxable income in India. However, under the Income Tax Act, 1961, NRIs/PIOs/OCIs are required to file an ITR in India only under the following circumstances:

• Their taxable income1 during the relevant Financial Year (F.Y.), running from April 1 to March 31, exceeds the Basic Exemption Limit of ₹2,50,0002 under the old tax regime or ₹4,00,0003 under the new (default) tax regime; or
• Their taxable income is below the Basic Exemption Limit, but during the relevant previous year, the NRI has:i. Earned Short-Term Capital Gains (STCG) from Equity Shares, Units of Equity-Oriented Mutual Funds, or Units of Business Trust; orii. Earned any Long-Term Capital Gains (LTCG) that are taxable; oriii. Deposited more than ₹1 crore in a current account held with a bank or co-operative bank in India; oriv. Spent more than ₹2 lakh from an Indian bank account on foreign travel for themselves or another person4; orv. Incurred electricity consumption expenses exceeding ₹1 lakh in India; orvi. Recorded business sales, turnover, or gross receipts exceeding ₹60 lakh; orvii. Earned professional gross receipts exceeding ₹10 lakh; orviii. Had total Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) amounting to ₹25,000 or more; orix. Deposited more than ₹50 lakh in savings bank accounts in India.

1 Taxable income for ITR filing purposes refers to gross total income before considering exemptions for reinvestment of capital gains and deductions under Chapter VI-A, such as donations, life insurance premiums, Unit Linked Insurance Policies, Equity Linked Savings Schemes, Mediclaim, etc.

2 As specified under the Finance Act 2025 for FY 2025-26 onwards.

3 Section 115BAC of the Income Tax Act, 1961.

4 Travel does not include visits to Bangladesh, Bhutan, Maldives, Nepal, Pakistan, or Sri Lanka, or visits to pilgrimage destinations such as Saudi Arabia.

Did you know?

From FY 2025-26 onwards, under the New Tax Regime, only resident taxpayers can claim the rebate and pay no personal income tax on total income up to ₹12 lakh, excluding income taxable at special rates such as capital gains. NRIs are not eligible for this rebate.

If you choose the existing old tax regime, total taxable income, as explained above, is calculated before considering deductions such as life insurance premiums, tuition fees, investments in Equity Linked Savings Schemes (ELSS) under Section 80C, medical insurance under Section 80D, and donations under Section 80G.

Under both tax regimes, specified exemptions relating to reinvestment of long-term capital gains, such as investments in new residential properties or specified bonds, will continue to apply.

It is important to understand that you are not required to file an income tax return if you choose taxation under the special provisions for certain non-resident incomes under Chapter XIIA of the Income Tax Act, 1961. However, this exemption is available only when both the following conditions are satisfied:

• Your total income comprises only investment income, income from long-term capital gains, or both.
• Tax has already been deducted at source.

Did you know?

If the same income is taxed in both India and your country of residence, check whether that country has entered into a Double Taxation Avoidance Agreement (DTAA) with India. If such an agreement exists, you may be eligible for treaty benefits or Foreign Tax Credit (FTC) in your country of residence under the applicable DTAA. It is advisable to consult a tax professional to understand the relevant DTAA provisions.

Although filing an ITR is not compulsory for every NRI, submitting one voluntarily can offer several advantages. These include:

• Maintaining a consistent record of income tax return filings.
• Claiming Foreign Tax Credit in your country of residence, subject to its applicable tax laws. For example, to claim FTC in India, you must submit Form 67 online through the Income Tax Department.
• Claiming refunds for excess TDS or tax paid in India, wherever applicable.
• Improving your creditworthiness in India.
• Making visa applications and renewals easier.

If you wish to benefit from these advantages and want to understand how to file ITR for NRI, the filing procedure and deadlines are generally similar to those applicable to resident Indians.

Conclusion

As an NRI, PIO, or OCI, you may need to file an income tax return in India if your Indian income exceeds the prescribed threshold or if you want to claim a refund for excess tax deducted. Although ITR filing is compulsory only in specific situations, voluntarily submitting a return can provide several benefits. Regularly consulting a tax professional can help you comply with Indian tax regulations and stay informed about the latest income tax filing requirements for NRIs.

FAQs

Q- When is an NRI required to file an income tax return in India?

An NRI generally needs to file an Indian income tax return when their total income taxable in India exceeds the applicable basic exemption limit for the relevant assessment year. Filing may also be mandatory in certain situations specified under the Income Tax Act.

Q- Is ITR filing mandatory for every NRI?

No. NRI status alone does not make ITR filing mandatory. The requirement depends on the NRI’s taxable income in India and other conditions prescribed under the applicable income tax law.

Q- Does an NRI have to file an ITR if they only earn foreign income?

Generally, foreign income that is not taxable in India does not by itself require an NRI to file an Indian ITR. However, the NRI’s residential status and the nature and source of income should be evaluated before determining the filing requirement.

Q- Is an NRI required to file an ITR for income from an NRO account?

Interest earned on an NRO account is generally taxable in India. If the NRI’s total taxable income or other applicable filing conditions require a return, the NRI must file an ITR.

Q- Does an NRI need to file an ITR for rental income from property in India?

Rental income from property located in India is generally taxable in India. An NRI may therefore need to file an ITR depending on the total taxable income and applicable filing requirements.