✅ When an NRI Must File Income Tax Return in India
An NRI is mandatorily required to file ITR in India if:
1. Total Indian Income exceeds ₹2,50,000
If the total income earned or received in India exceeds ₹2.5 lakh in a financial year (before claiming deductions), the NRI must file an ITR.
- This includes:
- Salary received in India
- Rental income from property in India
- Capital gains from sale of Indian assets (e.g., shares, property)
- Interest from Indian bank accounts or fixed deposits
- Any other income accrued or deemed to accrue in India
💡 Note: Income earned outside India is not taxable in India for NRIs.
2. Claiming Refund of TDS Deducted
If tax is deducted at source (TDS) on any Indian income (e.g., bank interest, rent, dividends), and the NRI wishes to claim a refund, then filing an ITR is required.
3. To Claim DTAA Benefits
To claim the benefit of Double Taxation Avoidance Agreement (DTAA) (e.g., lower TDS on interest or dividends), an NRI may need to file an ITR and submit tax residency and other proofs.
4. Having Capital Gains in India
If the NRI has any capital gains from sale of property, mutual funds, or shares in India (short-term or long-term), ITR filing is mandatory, even if the total income is below ₹2.5 lakh.
🛑 Exception: Long-Term Capital Gains (LTCG) under Section 112A (e.g., on listed shares over ₹1.25 lakh) are taxable and require ITR filing if gains exceed that amount.
5. When Carry Forward of Losses is Desired
To carry forward losses under capital gains or business income to future years, the NRI must file the return within the due date (usually 31st July).
6. Specified Foreign Assets or Bank Accounts
If the NRI later becomes a resident, and had previously held foreign assets or signing authority in foreign bank accounts, disclosure and ITR filing may be required under Black Money Act, but this does not apply while they remain NRI.
❌ When NRI is Not Required to File ITR in India
- Income in India is less than ₹2.5 lakh and no TDS refund is to be claimed.
- Only investment in NRE/FCNR accounts (interest from these is tax-free in India).
- Only exempt income (e.g., agricultural income in India, dividend up to ₹10 lakh before FY 2020-21, etc.).
📌 Important Points
| Criteria | NRI Requirement |
|---|---|
| Income earned outside India | Not taxable |
| Indian income > ₹2.5 lakh | File ITR |
| TDS refund or DTAA claim | File ITR |
| Capital gains (any amount) | File ITR |
| Carry forward of losses | File ITR before due date |
| NRE account interest | Exempt |