NRI's Ultimate Guide to India Tax Filing

The Income Tax Portal helps NRI/ OCI taxpayers to file their returns and view your information relating to pending notices, previous year returns, etc. Here’s a step-by-step guide to filing Income Tax returns in India.

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Prerequisites For Filing Income Tax Returns (ITR) Online

Before, we get into the step-by-step process, here’s a list of prerequisites that you should be aware of for filing ITR online - 

• Active PAN - Your PAN and Aadhaar must be linked. Please Note: If your PAN is not linked with your Aadhaar, your PAN is made inoperative. 
  In that case while filing your return, you will get a ticker message “Your PAN is made inoperative as it is not linked with Aadhaar. Some of the accesses may be limited. You can link and make your PAN operative after payment u/s 234H.”
• It is recommended to Pre-validate at least one bank account and nominate it for refund.‍
• Valid mobile number linked with Aadhaar / e-Filing portal / your bank / NSDL / CDSL (for e-Verification)

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How To File Income Tax Return Online? Your Step-By-Step Guide

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Step 1 - Login or Register to incometax.gov.in

Create your login, in case you are a new user. If you are an existing user, login using your credentials → PAN Number/ Aadhaar and Password.

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Step 2 - Verify Your Details

On the Dashboard screen, verify your details and proceed to file your returns.

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Step 3 - Select the Assessment Year and Mode of Filing

On the following screen, select the assessment year and choose the preferred mode of ITR filing - online or offline.

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Step 4 - Start New Filing or Continue With A Saved Draft

Click on ‘Start New Filing’ to create your Income Tax filing.

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Step 5 - Select Your Taxpayer Type

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Step 6 - Select The Right ITR Form 

ITR-2 ➡️ applicable for all types of income except business income. 

ITR-3 ➡️For business income

Select the suitable form and Click on ‘Proceed’

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Step 7 - Get Started 

On the following page, click on ‘Get Started’ to start your ITR filing.

You keep the following documents handy, to complete the filing faster -

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Step 8 - Reason To File

Select your reason for filing the income tax return -

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Step 9 - Fill All The Details

You need to fill in all the necessary details before submitting the form. The ITR Form 2 has the following sections -

• Part A General, Schedule Salary, Schedule House Property, Schedule Capital Gains, Schedule Other Sources, Schedule VI-A, Schedule 80G and Schedule 80GGA and more.
• Part B – Total Income (TI)
• Tax Paid
• Part B -TTI: You will be able to view the overall computation of total income tax liability on total income.

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Step 10 - Review And Submit

Next review the summary section →

• Your tax computation
• Pay tax
• Submit the return for verification

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What Are The Documents Required For Tax Filing?

The following is your Documents Checklist, to keep handy while filing your income tax return

✅ PAN Card: Essential for tax filing.

✅ Passport: Determines citizenship status.

✅ Form 16: Details income and TDS deductions for Indian employment.

✅ Bank Account Details: Tax refunds are credited to the Indian bank account.

✅ Bank Statements: Track interest income for the financial year.

✅ Property Documents: Ownership documents for property in India.

✅ Rent Receipts: Required for rented Indian properties.

✅ Investment Statements: Records of Indian investments like mutual funds or stocks.

✅ Insurance Policy Details: Proof of any health or life insurance policy documents

✅ Tax Paid Details: Proof of taxes paid during the financial year.

✅ Foreign Income Details: Documentation for income earned outside India.

✅ Other Details: Unique requirements like TDS certificates or agricultural income.

Also, it is advisable to keep the calculation of no. of days stayed in India for the previous year and last 5 years handy. This is useful for determining your NRI tax status.

For NRIs, obtaining insurance in India offers not only security but also tax benefits, as explained in our blog on "Should NRIs Get Insurance in India? Read to know more.

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Tax Slabs in India for NRIs

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Understanding NRI Tax Brackets

Just like residents, NRIs are taxed based on income slabs. These slabs range from 0% to 30%, with a surcharge applicable for higher income brackets.

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Confused between which regime to choose? Read our blog - Old Tax Regime Vs New Tax Regime - What Should NRIs Choose?

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Taxable Income For NRIs

As an NRI, income generated in India attracts tax. But knowing what income is taxed and what isn’t is important.

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Tax Deductions & Exemptions For NRIs and OCIs

The good news is that NRIs can avail certain tax deductions and exemptions, similar to residents. These can significantly reduce your tax burden.

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Note - A maximum deduction of up to Rs 1.5 lakh is allowed under Section 80C. Also, all exemptions and deductions are available only if you are filing taxes as per the old regime.

Here’s a blog on Tax Saving Investments for NRIs with Income in India.

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Conclusion

Filing your NRI income tax return in India might seem complex, and time consuming. Having an expert do all the heavy lifting for you and help you through these complexities can be a blessing right?

At iNRI, we’ve curated a marketplace for you to assist with taxation services. Pick an expert CA/ CPA who specializes in NRI and Cross Border taxation.

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Remember, meeting the deadlines and filing accurately is crucial to avoid penalties. If you have any doubts, consult a qualified tax advisor who specializes in NRI taxation.

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NRI India Income Tax Filing: Frequently Asked Questions (FAQs)

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Should I file my ITR even if my income is below the taxable limit?

Yes, you can still file your ITR electronically even if your income falls below the taxable limit. It's a good practice to maintain a record of your tax filings.

To better understand how NRIs are taxed on mutual fund investments in India, check out our detailed guide on Tax Liabilities for NRIs/OCIs in Indian Mutual Funds and Listed Shares.

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Here’s why it is beneficial to file taxes -

• ITR is the only document that substantiates your status as a Non-Resident.
• To claim a refund of Tax Deducted at Source (TDS)
• Enhanced financial eligibility, for example, useful when you are taking a loan.
• Carry forward of losses to set it off in the future.

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Which tax regime should I choose, old or new?

The best regime for you depends on your individual income profile and deductions.

Here’s a detailed blog comparing which is a better option for NRIs - Old Tax Regime Vs New Tax Regime - What Should NRIs Choose?

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What happens if I miss the deadline for filing my NRI tax return?

You can file your returns even after the due date, however late filing will attract penalties.

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