10 Things Every NRI Must Check Before Filing an Income Tax Return in India

You sit down to file your Indian income tax return. You think: "I've done this before. How different can it be?"

Very different, it turns out.

NRI ITR filing is not the same as a resident's return. It has its own rules, its own forms, and its own traps. And the frustrating part? Most generic filing guides don't cover any of them. Some CAs miss them too. Filing with the wrong residential status or skipping a DTAA claim can result in a defective return, a missed refund, or a notice sitting in your inbox from the Income Tax department.

Before you file your ITR for FY 2025-26, here is what every NRI must check. These are 10 specific things to verify or prepare, in the order you should address them.

Why NRI ITR Filing Is Different From a Resident’s Return

Think of a resident's ITR as a standard recipe. NRI ITR filing is the same dish, but with completely different ingredients.

Your residential status is not pre-filled correctly in all cases. You have to verify and select it yourself. ITR-1 is not available to you at all. The Section 87A rebate does not apply to NRIs, even if your Indian income is below ₹7 lakh. If your residential status changes, additional disclosure requirements may apply depending on whether you qualify as RNOR or Resident and Ordinarily Resident (ROR). DTAA relief is not applied automatically. And your refund only reaches a pre-validated Indian bank account.

Miss any one of these. And you are dealing with a defective return or a demand notice. This checklist covers all of them.

Check 1: Confirm Your Residential Status for the Financial Year

Everything starts here. Get this wrong and the entire return is built on a shaky foundation.

Your residential status for income tax is determined by the residential status rules under Section 6 of the Income Tax Act and how many days you physically spent in India during FY 2025-26, from April 1, 2025 to March 31, 2026. Count every single day. Including the day you landed and the day you left.The 182-day rule is the most commonly used test. However, there are additional rules that can affect your status depending on your circumstances. One important example is the special 120-day rule that applies to certain Indian citizens and Persons of Indian Origin (PIOs) visiting India whose Indian income exceeds ₹15 lakh. One longer-than-usual trip home could change your tax status entirely.

Do not assume last year's status still applies. Recheck every year. Life changes. Travel patterns change. And so can your tax obligations.

There is also a third category worth knowing about. If you returned to India permanently during this financial year, you might qualify as RNOR (Resident but Not Ordinarily Resident). RNOR sits between NRI and full resident status. It has different tax treatment from both. And it is easy to miss if you are not looking for it.

Selecting the wrong status in your ITR is a misrepresentation. The department can flag it, and you may get a notice asking you to explain the discrepancy.

Internal link suggestion: Who Qualifies as an NRI for Income Tax | RNOR vs NRI vs Resident

Check 2: Select the Correct ITR Form

This is the most common filing mistake NRIs make. And it is completely avoidable.

A lot of NRIs reach for ITR-1 because it looks simpler. Shorter. Less intimidating. But ITR-1 is not available to NRIs under any circumstances. Filing it anyway results in a defective return notice from the department. You then have to refile. Under time pressure. With added stress.

Here is a clean breakdown of which form applies to you:

• ITR-1 (Sahaj): Not for NRIs. Not ever.
• ITR-2: The correct form for most NRIs. Use this if you have NRO interest, rental income, capital gains from shares or property, or foreign assets.
• ITR-3: Required only if you have income from a business or profession in India.
• ITR-4: Not applicable for NRIs.

If you have capital gains or foreign assets, ITR-2 is the right form. Regardless of how simple or small the income looks. The portal does not always stop you from picking the wrong form. That choice is on you.

Internal link suggestion: How NRIs Can File ITR Online in India

Check 3: Choose Between Old and New Tax Regime

From AY 2026-27, the new tax regime is the default. If you want the old regime, you have to actively select it. The system will not ask. It will simply assume you are going with the new one.

So which one should you pick?

The new regime offers lower slab rates. But it strips away almost all deductions. No 80C. No 80D. No home loan interest deduction on Indian property. And critically, the Section 87A rebate is not available to NRIs even under the new regime. This is a big deal because that rebate is what makes the new regime so attractive for resident Indians with income below ₹7 lakh. For NRIs, that benefit simply does not exist.

The old regime has higher slab rates but lets you claim deductions. If you have Section 80C investments, health insurance premiums, or a home loan on an Indian property, the old regime might actually save you money.

Here is a simple way to think about it. If your Indian deductions are minimal, the new regime's lower rates likely give you a smaller tax bill. If you have meaningful deductions adding up to ₹1.5 lakh or more, run the numbers under the old regime before deciding.

Do not guess. Calculate your tax under both regimes before you make the selection. A few minutes of comparison can mean a meaningful difference in what you owe.

Check 4: Verify TDS Credits in Form 26AS and AIS

A lot of NRIs skip this step entirely. Then they file a return claiming TDS credits. Then they get a notice saying those credits do not match what the department has on record.

It is a frustrating situation. And it is avoidable.

Form 26AS is like a ledger the Income Tax department maintains for you. It shows every rupee of TDS deducted against your PAN. By your bank on NRO interest. By your tenant on rent. By a property buyer on the sale proceeds. All of it should be here.

AIS (Annual Information Statement) goes a step further. It captures a broader picture of all financial transactions reported to the department in your name. Think of it as the extended version of Form 26AS.

Before you file, open both. Match them against the TDS certificates you have received. If TDS was deducted but does not appear in Form 26AS, you cannot claim that credit in your ITR. The department will raise a mismatch notice.

Any discrepancy needs to be flagged to the payer and corrected before you file. Not after.

How to access both: Log in to incometax.gov.in, go to e-File, and click on View Form 26AS. AIS is also available on the same portal under Annual Information Statement.

This takes 15 minutes. It can save you months of back-and-forth with the department.

Check 5: Gather All Income Documents

Think of this as packing your bag before a trip. You do not want to realise mid-journey that you forgot your passport.

Get everything in one place before you open the ITR portal. Here is what most NRIs need:

• NRO account interest: Bank statement or interest certificate showing interest earned and TDS deducted
• NRE account interest: Bank statement for your records (NRE interest is exempt from tax, but keep the document)
• Rental income: Rent agreements, rental receipts, municipal tax payment receipts, and home loan interest certificate if applicable
• Capital gains from shares or mutual funds: Broker statement or AMC capital gains report with buy and sell dates and amounts
• Capital gains from property: Sale deed, purchase deed, records of improvement costs, and indexed cost calculation
• Dividends: Broker or registrar statement
• Foreign income: Overseas salary slips and foreign bank statements, needed for Schedule FA and DTAA claims

If you start filing and realise a document is missing halfway through, you will have to stop, track it down, and restart. Gather everything first. Filing then becomes mechanical.

Check 6: Prepare Your DTAA Claim If Applicable

India has signed Double Taxation Avoidance Agreements (DTAAs) with most countries where NRIs typically live. The US, UK, UAE, Canada, Australia, Singapore, and many others. These agreements ensure you are not taxed twice on the same income.

But here is what most NRIs do not realise. DTAA relief does not apply automatically. The bank does not claim it for you. The ITR portal does not apply it on its own. You have to claim it. To make the process smoother and avoid delays or errors, it is best to have the following documents ready before you file:

TRC (Tax Residency Certificate): Issued by the tax authority in your country of residence. This is the document that proves you are a tax resident of that country for that financial year.

Form 10F: Filed online on the income tax portal. It supplements the TRC with specific additional details the department requires.

Both must be in place before you start filing. You cannot obtain them retroactively after you have already submitted the return.

DTAA relief is claimed in Schedule TR of the ITR. If you also paid foreign taxes and want to claim credit for them in India, that goes through Form 67.

One more thing to check. If your bank already applied a lower TDS rate because of a DTAA, verify that this lower rate is correctly reflected in Form 26AS.

Internal link suggestion: What Is Form 10F and How to File It | How to Claim Foreign Tax Credit Using Form 67

Want an expert to handle your NRI ITR filing? Talk to MostlyNRI. [CTA Link]

Check 7: Prepare Schedule FA If You Are RNOR or ROR

This one catches a lot of returning NRIs off guard.

Schedule FA (Foreign Assets) is a section in the ITR where certain taxpayers must declare foreign bank accounts, investments, property, pension funds, and other financial interests held outside India during the financial year.

If you are still a non-resident NRI, Schedule FA generally does not apply to your return. You can skip this check.

If your residential status changed during FY 2025-26, determine whether you qualify as RNOR or Resident and Ordinarily Resident (ROR). In general, Schedule FA applies to ROR taxpayers, while RNORs typically enjoy relief from foreign asset reporting requirements.

Miss it and you are not just filing an incomplete return. You are exposing yourself to penalties under the Black Money Act.

Non-disclosure of reportable foreign assets can attract severe penalties under the Black Money Act, including penalties that may extend to ₹10 lakh in applicable cases.

And here is why non-disclosure is risky even if you think no one will notice. India receives foreign asset information through FATCA and CRS, two international data-sharing agreements. Foreign banks report NRI account details to the Indian government automatically. The department already has this data. They are just waiting to match it with your return.

Before you start filing, list every foreign bank account, investment property, pension fund, or financial interest you held during FY 2025-26. Go through it carefully. Make sure nothing is left out.

Internal link suggestion: RNOR Status Checklist | RNOR Investment and Compliance Guide

Check 8: Confirm Section 87A Rebate Does Not Apply to You

This is a short section. But it covers one of the most expensive NRI filing mistakes.

Under the new tax regime, Section 87A gives resident individuals a tax rebate of up to ₹25,000 if their total income is up to ₹7 lakh. In practice, this makes their entire tax liability zero. It is a significant benefit for resident Indians.

NRIs do not get this rebate.

Not even if your Indian income is below ₹7 lakh. Not even if you are filing under the new regime. The Section 87A rebate is available only to resident individuals. Full stop.

Here is where the problem happens. The ITR portal's tax calculation sometimes applies this rebate automatically. An NRI sees their tax liability sitting at zero. They think everything looks correct. They file. Then the department rejects the return and raises a demand notice for the full tax amount.

This is an important area that NRIs should verify carefully before filing. A quick review of the tax computation can help prevent unnecessary disputes later.

Before you submit: Open the tax computation in your ITR draft. Check if Section 87A rebate has been applied anywhere. If it has, remove it manually. Then recalculate. Then file.

Check 9: Pre-Validate Your Indian Bank Account for Refund Credit

You filed correctly. You are owed a refund. And then the refund never arrives.

This happens more often than you would think. And the most common reason is simple: no pre-validated bank account linked to the PAN on the tax portal.

The Income Tax department credits refunds only to a pre-validated Indian bank account that is linked to your PAN. It does not go to your overseas account. It does not go to the account you filed from. It goes specifically to the pre-validated account on the portal.

NRO and NRE accounts can generally be used for refund credit if they are eligible for pre-validation and correctly linked with your PAN. Check with your bank and verify the account status on the tax portal before filing.

Here is how to pre-validate:

1. Log in to incometax.gov.in
2. Go to Profile, then My Bank Accounts
3. Click Add Bank Account, enter your account number and IFSC
4. The portal sends a validation request, which can take a few days to complete

The account must be active. It must be in your name. The IFSC must be correct. If anything does not match, validation fails. Often silently.

Do this at least a week before you file. Validation takes time. If you add the account the night before the deadline and it has not completed, your refund cannot be processed. You will then need to resubmit details and wait through another reprocessing cycle. That can take months.

Check 10: Know Your ITR Deadline and Verification Requirement

Two things to know before you start. Many NRIs know one. They miss the other.

The deadline: The current ITR deadline for FY 2025-26 is July 31, 2026, unless extended by the Income Tax Department. If you miss it, a belated return can be filed up to December 31, 2026. But with a late filing fee under Section 234F: ₹1,000 if your income is below ₹5 lakh, and ₹5,000 if it is above.

The verification step: This is the one people forget. Filing the ITR is not enough. A filed but unverified return is treated as if it was never filed at all.

After submitting, you must verify it. Options available to NRIs include:

• Net banking EVC
• Bank account EVC
• Demat account EVC
• Digital Signature Certificate (DSC)
• Physical ITR-V sent to CPC Bangalore by speed post within 30 days of filing

Aadhaar OTP verification works only if you have a linked Aadhaar and an active Indian mobile number. Many NRIs do not have both. Plan your verification method before you file, not after.

One practical tip: file by July 15. That gives you two full weeks to complete verification before the July 31 deadline. Do not leave it to the last day and then discover your EVC is not working.

Internal link suggestion: How NRIs Can File ITR Online in India

Quick Pre-Filing Checklist: All 10 Checks at a Glance

Check	What to Verify	Done?
1	Residential status confirmed for FY 2025-26	☐
2	Correct ITR form selected (ITR-2 for most NRIs)	☐
3	Tax regime chosen: old or new	☐
4	TDS credits verified in Form 26AS and AIS	☐
5	All income documents gathered	☐
6	DTAA claim prepared: TRC and Form 10F ready	☐
7	Schedule FA prepared if RNOR or ROR	☐
8	Section 87A rebate not claimed	☐
9	Indian bank account pre-validated for refund	☐
10	Filing deadline and verification method confirmed	☐

If all 10 are in order, you are ready to file. If any are unclear, address them before you start. A mistake caught before filing takes an hour to fix. A mistake caught by the Income Tax department after filing takes months.

What is the penalty for filing ITR late as an NRI?

Under Section 234F, the late filing fee is ₹1,000 if your total income is below ₹5 lakh, and ₹5,000 if it is above. On top of that, if there is unpaid tax, interest under Section 234A applies at 1% per month from the original due date. A belated return for FY 2025-26 can be filed up to December 31, 2026.

Disclaimer: This content is for informational purposes only. NRI tax situations vary based on individual circumstances, country of residence, applicable DTAA, and income types. Please consult a qualified NRI tax advisor before filing your return. MostlyNRI's tax experts can review your specific situation and help you file accurately.

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