Whether you are living in the US or any country, if you have income generating in India, then it is mandatory that you file income tax return. Having said that, filing ITR is only mandatory if you meet the predetermined financial threshold. Therefore, it is important that you are acquainted with NRI tax filing India, which ITR form for NRI, and requirements for Indian income tax filing.
This comprehensive guide will tell you everything you need to know about Indian income tax returns for NRIs.
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Start Your ApplicationWhen Do You Need to File ITR for NRI
Before filing income tax return, it is important that you know when to file ITR and when you don’t have to.
Taxable Income
As a Non-Resident Indian (NRI), you only have to file ITR if you income generation in India from any valid source. This can be pension, rental income, capital gains, salary, investment returns, and/or interest from NRO (Non-Resident Ordinary) accounts.
Excluded from Taxation
Interest from NRE (Non-Resident External) accounts or FCNR (Foreign Currency Non-Resident) accounts is non taxable. Similarly, gifts from relatives are also exempted.
Financial Threshold
- According to the old regime, you have to file ITR if your income is more than ₹2.5 lacs.
- According to the new regime, you have to file ITR if your income is more than ₹4 lacs.
- You also have to file if you have more than ₹25000 from TDS or TCS.
Note: By default, the form will be filed under the new regime. However, if you want to file under the old regime, you can manually select it at the time of filing.
Income Tax Slabs for Indian Income
Learn about the fixed taxation slabs determined by the Government.
For New Tax Regime – Default
This is the default regime under which your ITR will be filed.
| Tax Slab | Tax Rate |
| Less than or equals to 4 lacs | No taxation |
| ₹4 lacs – ₹8 lacs | 5% |
| ₹8 lacs – ₹12 lacs | 10% |
| ₹12 lacs – ₹16 lacs | 15% |
| ₹16 lacs – ₹20 lacs | 20% |
| ₹20lacs – $24 lacs | 25% |
| More than ₹24 lacs | 30% |
For Old Tax Regime
This is the old regime. If you wish to file under this regime, you can select it manually at the time of filing.
| Tax Slab | Tax Rate |
| Less than or equals to ₹2.5 lacs | No taxation |
| ₹2.5 lacs – ₹5 lacs | 5% above ₹2.5 lacs |
| ₹5 lacs – $10 lacs | ₹12500 + 20% above ₹5 lacs |
| More than ₹10 lacs | ₹112500 + 30% above ₹10 lacs |
Surcharge Rates
Surcharge is additional tax applicable on the payable income tax, not on the principal income itself. Surcharge is usually levied for high income taxpayers.
| Total Income | Surcharge Rate |
| ₹50 lacs – ₹1 Crore | 10% |
| ₹1 Crore – ₹2 Crore | 15% |
| ₹2 Crore – ₹5 Crore | 25% |
| Above ₹5 Crore | 37% |
Which ITR Form for NRI
You must be aware of which ITR form for NRI is the correct one for you. The categorisation is based on the source of income.
- ITR-1: Not for NRIs.
- ITR-2: For NRIs with income from salary, rent, property, or capital gains in India.
- ITR-3: For business or professional income.
Documentation for Income Tax Filing in India
For proper income tax filing in India, you need to have certain supporting documents:
- PAN Card
- NRE or NRO bank account statements
- TDS or TCS certificates
- Capital gains statements
- Evidence for other income sources (rent agreement, dividends, pensions)
Need Help Filing Your Indian Income Tax Return?
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Start Your ApplicationNRI Tax Filing India
Follow the steps given below to carefully file income tax in India. Make sure you have selected the correct form, calculated the correct tax and provided the correct information.
- First of all, sign in at the official income tax portal.
- Select the relevant ITR form, ITR-2 or ITR-3.
- For TDS or TCS, form 26AS.
- Enter personal information, bank details, PAN number and other relevant information.
- Validate your bank account.
- Determine the tax on your income and make the submission.
- E-verify in person to authenticate the filing.
Repercussions of Not Filing ITR for NRI
If you file later than the last date of filing your Indian income tax return, then you will have to pay ₹1000 as fine for total earnings below than 5 lacs. If your total income is more than 5 lacs, then you have to pay the file of ₹5000.
If you don’t file the ITR, then an interest of 1% will be charged per month. Moreover, if you fail to file ITR for long periods, then you might have to face legal troubles and penalties.
Practical Tips
- Always make sure to file the ITR for NRI before the last day of filing. Filing late or not filing can lead to fines, penalties and legal troubles.
- Determine your eligibility beforehand. This includes which ITR form for NRI is relevant for you and which tax slab is applicable for you.
- If your total income is more than ₹50 lacs then surcharge will be applicable on the taxable amount. Make sure to file that as well.
- Fill the correct information on the form. This includes correct personal details, PAN number, bank account details and so on.
Final Thoughts
If you are a Non-Resident Indian (NRI) with income sources in India, then you should file ITR if your income is more than the filing threshold. However, choosing the correct form, filing with correct details, and navigating the official portal can be confusing for most people. That is why it is important to take help from professionals to avoid filing wrong. For income tax filing in India, NRE/NRO bank accounts, and other financial and consular Indian services, you can contact the team at Documitra.
FAQs
Q. Is it mandatory to file ITR form for NRI?
It is mandatory if you have income in India above the financial threshold determined by the government guidelines.
Q. What will happen if I don’t file ITR in India?
If you have income in India above the threshold and don’t file ITR, then you will be fined, and might even have to face legal complications.
Q. Which ITR form for NRI should I file?
For income generating in India from sources like salary, dividends, rent, etc. you should file ITR-2. For business and professional income, you have to file ITR-3.
Q. In which tax regime should I file ITR?
It completely depends on which tax slab and relating tax rates you want to file under. The new tax regime is the default when filing Indian income tax returns.