ITR filing checklist for NRIs

Navigating the intricate realm of income tax as a Non-Resident Indian (NRI) in India can be perplexing, especially when juggling investments, assets, and the labyrinth of legalities. This guide aims to shed light on the essentials of tax filing for NRIs, ensuring clarity and compliance.

Tax Return

Residential Status: The Tax Foundation

Determining your residential status in India is the cornerstone of your tax obligations. For the financial year, commencing on April 1 and concluding on March 31, NRIs must establish their stay duration. Staying beyond 181 days renders you a resident, subjecting your global income to taxation. In contrast, a stay of 181 days or less preserves your NRI status, taxing only your income within India.

Filing Taxes: Navigating the Terrain

As an NRI with passive income in India, employing the ITR – 1 SAHAJ form streamlines your online tax filing. Tailored for individuals with salaried income, a single property, and diverse income sources under INR 5 million, this simplified form eases the filing process.

However, if your financial landscape extends beyond ITR – 1 criteria, ITR – 2 steps in. Applicable to NRIs with multiple properties generating passive income, this form excludes engagement in business activities in India.

Aadhar Card: A Respite for NRIs

Addressing a common concern, NRIs need not disclose their Aadhar Card Number while filing tax returns, courtesy of Section 139AA of the Indian Income Tax Act. This exemption, confirmed by the Central Board of Direct Taxes, alleviates worries about Aadhar Card inclusion.

Assets and Liabilities: An Inclusive Approach

For NRIs surpassing an annual income of INR 5 million, comprehensive reporting of movable and immovable assets, along with associated liabilities, becomes imperative. This detailed disclosure occurs through the ITR – 2 form, providing a holistic financial overview.

Tax Refunds: A Streamlined Process

Recent changes in rules for NRIs claiming tax refunds introduce a simplified approach. Those with an operational bank account in India no longer need to divulge foreign bank details. Conversely, without an Indian bank account, furnishing foreign account details becomes crucial for refund processing.

Double Tax Avoidance Agreement: A Strategic Maneuver

NRIs filing taxes internationally can leverage the Double Tax Avoidance Agreement. Ensuring your country of residence has a pact with India, submitting a Tax Residency Certificate becomes pivotal. This strategic move allows NRIs to opt for US tax filing services in India, coupled with self-declaration in the income tax form 10F.

Conclusion: Navigating Tax Waters with Confidence

In the complex landscape of Indian tax regulations, NRIs can confidently steer through compliance by understanding their residential status, selecting the appropriate tax form, and embracing the nuances of asset disclosure and tax refund protocols. Leveraging international agreements further enhances the tax-filing journey.


Do NRIs have to disclose Aadhar Card details when filing tax returns?

No, according to Section 139AA, NRIs are exempt from mentioning their Aadhar Card Number.

Which form should an NRI use for online tax filing with passive income in India?

NRIs with passive income can utilize the ITR – 1 SAHAJ form for simplified online filing.

What is the significance of the Double Tax Avoidance Agreement for NRIs?

The agreement allows NRIs to avoid double taxation by leveraging tax treaties between countries.

How has the process of claiming tax refunds changed for NRIs?

NRIs with an operational bank account in India no longer need to provide foreign bank details for tax refunds.

Can NRIs engage in business activities in India while using the ITR – 2 form for tax returns?

No, the ITR – 2 form prohibits NRIs from indulging in any business activities in India.


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