ITR Filing 2026: 7 Major Changes NRIs Must Know

With the introduction of the Income Tax Act 2025, ITR filing for NRIs has undergone some significant changes. As we prepare for the upcoming assessment year (AY) 2026-27, NRIs must be aware of the various updates that impact the tax filing procedure, reporting requirements, and deadlines.

To ensure compliance and maximize tax benefits, you must understand these changes. In this blog, we will outline the 7 major ITR filing 2026 changes that NRIs must understand before filing by the 31st of July 2026.

Change 1: New Income Tax Act

From April 1, 2026, the Income Tax Act, 1961, has been replaced by the Income Tax Act 2025. However, for the income of FY 2025-26 (AY 2026-27), the ITR is filed entirely under the Old Act. It means income earned before 1st April, 2026, is filed under the Income Tax Act 1961, while income earned after 1st April, 2026, falls under the Income Tax Act 2025.

Consider the table below to know which act is applicable based on the year of filing and the deadline for the same:

When filing for FY 2025-26 income, NRIs must choose AY 2026-27 on the e-filing portal. Both the acts run simultaneously on the portal.

This new change introduces a unified 'Tax Year'. It basically removes the old assessment year/financial year confusion. However, it doesn't affect the past obligation under the old 1961 act, and it remains completely valid.

Change 2: New ITR Forms with Updated Eligibility and Disclosures

On 31st March, 2026, the Income Tax Department released updated ITR forms for AY 2026-27, ITR-1, ITR-2, ITR-3, and ITR-4. Several updates in the structure may directly affect NRIs:

• Reporting Expanded House Property: Individuals with up to 2 house properties can now use ITR-1 and ITR-4. However, NRIs are not allowed to use ITR-1 under any situation. The standard form for NRIs remains ITR-2 for reporting salary, rental, capital gains, and NRO income. Also, to report business income, use ITR-3.
• Disclosing Enhanced Tenant: ITR forms now cover the name, PAN, TAN, or Aadhaar of the tenant. Hence, NRIs renting a property must have this information ready.
• Report F&O Separately: You must now report F&O (Futures & Options) trading separately in ITR-3, including turnover and income in P&L. Hence, NRIs with derivatives income must report this separately.

Change 3: Revised Capital Gains Tax Rate

The capital gains tax revisions introduced in Budget 2024 now apply to the full FY 2025-26 filing. Under Budget 2024, significant revisions were introduced in which the short-term capital gains tax was raised to 20%. On the other hand, the long-term capital gains tax was raised to 12.5%, and indexation for most assets was removed.

The old capital gains rates for listed equity securities are no longer applicable for gains in FY 2025-26. It was 15% for short-term capital gain and 10% for long-term capital gains. Therefore, the respective fields have been removed from all the relevant ITR forms.

Moreover, for NRI property sales, LTCG (held for more than 24 months) is taxed at 12.5% without indexation for sales after 23rd July, 2024. Or, 20% with indexation under the old regime for eligible cases.

NRIs should recalculate capital gains as per the new rates, as the old (15% (STCG) and 10% (LTCG)) fields have been removed from ITR forms.

Change 4: Extended Deadline

The ITR filing deadline for AY 2026-27 follows a structured timeline based on the category of taxpayers. The table below lists the deadline for ITR filing along with the required form based on the type of taxpayer:

If you miss the July 31st deadline, you can file a belated return by 31st of December, 2026. However, a penalty of ₹5,000 applies, which is reduced to ₹1,000 if your total income is ≤ ₹5 lakh. You will also have to pay an additional 1% monthly interest on any unpaid tax.

Moreover, the due date to file a revised ITR has been extended. Earlier, it was December 31, 2026; now it has been extended to March 31, 2027. Moreover, if you file for the revised return after the 31st of December, a fee of ₹1,000 - ₹5,000 applies.

Change 5: Form 10F and DTAA are Now Fully Mandatory Online

For NRIs, DTAA benefits are one of the most powerful tools to save tax. However, the compliance process has now become stricter. Since October 2023, Form 10F paper filings have been rejected. Hence, NRIs are required to file Form 10F mandatorily before the due date of filing their ITR.

To claim the benefits of DTAA, NRIs must obtain a Tax Residency Certificate (TRC) from their country's tax authority, file Form 10F online on the Income Tax portal, and submit it to the payer. Any discrepancy between Form 10F and TRC can lead to full TDS deduction at the default rate.

Under many DTAA treaties, the interest on the NRO account can be reduced from 30% to 10-15%. However, you can claim it only if you submit all the required documents.

Change 6: Stricter Asset Disclosure in Schedule AL

Requirements to report Indian assets have now been made stricter by the Income Tax Act 2025. So, NRIs who are filing ITR-2 with a total income exceeding ₹1 crore must fill Schedule AL. Remember that Schedule AL follows the Indian financial year, which is April 1 to March 31.

For AY 2026-27, NRIs must report all Indian assets they have held at any point between April 1, 2025, and March 31, 2026. It means even if assets are sold or closed mid-year, you must declare them. For non-disclosure, you may face a penalty of ₹10 lakh per year under the Black Money Act and even prosecution risk in serious cases.

Change 7: Form 26AS Replaced by Form 168 From Tax Year 2026-27

Starting from Tax Year 2026-27, Form 26AS will be replaced by Form 168, which will combine AIS data directly. Moreover, Form 26AS and AIS continue for AY 2026-27. Any credit that is not reflected in Form 26AS will be rejected by the portal. Submit feedback for wrong AIS entries to notify both the source and the deductor.

Remember that banks report all FD interests to AIS regardless of the TDS threshold. Moreover, even if no TDS was deducted, the income is reflected in AIS and must be reported in the ITR

These were the seven major 7 changes made in ITR that NRIs must be aware of. Moving further, we will see a quick checklist for NRI ITR filing for AY 2026-27.

NRI ITR Filing Checklist for AY 2026-27

Here are some things you must do and consider while filing NRI ITR for AY 2026-27:

• Determine your residential status for FY 2025-26, whether NRI, RNOR, or Resident
• Collect Form 16A and TDS certificates from all deductors
• Cross-check Form 26AS and AIS and resolve mismatches (if any)
• File Form 10F online and obtain TRC for DTAA claims
• Use ITR-2 or ITR-3 for business income, but never ITR-1
• Report Indian assets in Schedule AL using the Financial year (April 2025 - March 2026)
• File Form 67 along with the ITR to claim the foreign tax credit
• E-verify your return within 30 days, as unverified returns are treated as not filed
• Ensure to file by the 31st of July, 2026 (or the 31st of August for non-audit business cases).

The Bottom Line

This filing season gathers a new tax act, revised capital gains rates, mandatory online DTAA compliance, and updated ITR forms - all at once. The ITR filing deadline for most NRIs remains the 31st of July, 2026. You must ensure to start early, reconcile your AIS, file Form 10F, and verify capital gains calculations using the updated rules.

Moreover, for assistance with ITR filing to ensure compliance and accuracy, connect with an expert at Savetaxs. At Savetaxs, we have been helping NRIs from more than 90 countries in filing their ITR in compliance with the Indian tax laws. Our experts have comprehensive experience in ITR filing, and they can help you ensure your ITR is filed on time, that eligible tax exemptions are claimed, and that everything is done in adherence.

Connect with us right away as we are working 24/7 across all time zones, and file your ITR accurately without facing any penalties.