NRI Income Tax in India (2025): Rules, Slabs, Capital Gains & ITR Forms

In India, non-resident Indians (NRIs) must file taxes if they have taxable income in the country. ITR filings for NRIs are subject to specific rules. Further, these rules are subject to change from time to time. Considering this, for the Assessment Year (AY) 2026–27, the income tax authority has implemented several revisions to ITR forms and filing rules.

Having information about them will help NRIs claim refunds on TDS, maintain financial records in India, and more. Want to know all about this? This guide contains all the information on ITR filings for NRIs, including income tax slabs, due dates, forms, and updated rules. Read on for all the details.

Who is an NRI for Tax Purposes?

An individual is considered a resident if he/she satisfies either of the following conditions:

• Stayed in India for 182 days or more during the financial year.
• Stayed in India for 60 days or more during the financial year and 365 days or more in the preceding 4 years.

If you do not meet any of the above conditions, you are treated as an NRI for tax purposes.

As an NRI, you only pay tax on income that arises, accrues, or is received in India.

Income Tax Slabs and Regimes for NRIs in India

Residents and NRIs follow the same tax slabs. Taxpayers may choose between the old and new tax regimes, each having different benefits.

Under the new tax regime, most exemptions and deductions such as HRA, LTA, 80C, 80D, PF, etc., are not available. The old regime continues to allow them.

Below are the correct slabs for AY 2026–27:

The new tax regime aims to significantly reduce your tax liabilities. Considering this, NRIs paying taxes on Indian-sourced income may receive lower tax rates. Additionally, get higher tax returns.

Moving further, let's know when an NRI should file taxes in India. 

When Should an NRI File ITR in India?

NRIs need to file ITR in India when they have taxable income in the country. Considering this, according to the Income Tax Act, 1961, NRIs must file an ITR if their gross income in India is more than:

• In a relevant financial year (April 1 to March 31), the Taxable income is more than the basic exemption limit, i.e., INR 2,50,000 (old tax regime). This basic exemption limit is according to the Finance Act 2025 for FY 2025-26. Further, under the new tax regime, the basic exemption limit is INR 4,00,000 as per section 115BAC of the IT Act 1961.
• Where the taxable income of NRIs is less than the basic exemption limit, however, during the relevant year, they have:
• Deposited amount more than INR 1 crore in an Indian bank in a financial year.
• In an Indian savings bank account, more than INR 50,00,000 is deposited in a financial year. 
• Tax is chargeable on long-term capital gain (LTCG).
• Received short-term capital gain (STCG) on units of business trust, equity shares, and more.
• From an Indian bank account, a travel-related expenditure of more than INR 2,00,000 was made to a foreign nation.
• If the TCS or TDS on income received in India is more than INR 25,000, tax is charged. 
• As per the old tax regime, INR 2,50,000.
• According to the new tax regime, INR 3,00,000.

This was all about the income tax regimes and slabs for ITR filings for NRIs in AY 2026-27. Further, the deadline for ITR filings for NRIs and residents for AY 2026-27 will be July 31, 2026. 

Moving ahead, let's know about the ITR form available for non-residents. 

Which ITR Form Should NRIs Use?

Depending on the source of income, there are two types of forms that NRIs can fill out. These are as follows:

• ITR-2 Form: For income from salary, capital gains, or property.
• ITR-3 Form: For income from business or profession in India.

So, depending on your source of income, you can choose from any of these NRI ITR forms. Moving further, let's know the key changes for AY 2026-27 impacting NRIs.

Key Changes for AY 2026–27 Impacting NRIs

Here is the list of key changes for AY 2026-27 impacting NRIs:

Relaxed Rules for Self-Occupied Property

Many NRIs in India own properties that are either occupied by family or vacant. In the past, these properties were treated as "deemed to be let out," where owners needed to pay tax on notional rent. Subject to specific conditions, up to two self-occupied properties were exempt from notional rent tax. However, in the Budget 2025-26, these conditions were removed. This allows NRIs with up to two self-occupied properties to enjoy tax-free ownership in India. 

Stricter Reporting of Foreign Assets

To enhance curb tax evasion and transparency, the government of India for foreign assets has imposed stricter reporting requirements. Considering this, now every NRI should declare:

• Foreign real estate holdings
• Cryptocurrency holdings on foreign exchanges
• All foreign bank accounts
• International stocks & ETFs

Failure to disclose correctly these assets could result in facing severe penalties. These include:

• Potential criminal prosecution
• On any undeclared tax dues, a 300% penalty is charged

This further underscores the importance of NRIs maintaining detailed records of their foreign assets and income.

Significant Economic Presence (SEP) Rules

A major concern for NRIs who operate businesses overseas is the SEP rule. Considering this, even though the business is not physically present in India, if it includes Indian customers, then they are liable to pay tax in India. The SEP rule applies to:

• E-commerce platforms
• SaaS companies
• Independent consultants helping Indian customers

Hence, having a business in tax-friendly destinations like Singapore or Dubai no longer protects NRIs from Indian taxation. NRIs with international business should restructure their functioning and assess their tax obligations.

Increased Scrutiny on Foreign Remittances

The Liberalized Remittance Scheme (LRS), which allows people to send money overseas, now has strong tax collection at source (TCS) regulations:

• For overseas transfers of more than INR 7,00,000, you need to pay higher tax deducted at source (TDS) rates.
• Tax exemptions are still available for medical and educational expenses. However, for this, you need to provide more documentation. 

So, those days are gone when you make cross-border transactions hassle-free. Now, you should carefully plan things and document your remittances. 

Foreign Pension & Retirement Funds

NRIs who have a foreign pension scheme, such as EPF in the UAE, 401(k) in the US, or Superannuation in Australia, should be careful that:

• Withdrawals from foreign pension funds may be taxable in India. Additionally, tax liabilities depend on your residential status and specific conditions. 
• However, strategically planning withdrawals can reduce tax liabilities. 

These are some of the key changes made by the Indian government in Budget 2025-26. This will come into effect from April 1, 2026. As an NRI, it is vital that you understand these changes and work accordingly. 

Now, moving ahead, let's know the required documents for NRIs filing ITR in India. 

Documents Required for NRI ITR Filing

Here is the list of the following documents that NRIs are required to submit to file ITR in India:

• PAN Card: It is one of the mandatory documents for ITR filings for NRIs.
• Passport and Visa Details: Required to know the residential status.
• Investment Proofs: For claiming tax deduction under sections like 80C, 80D, and more.
• Bank Statements: Both Indian and foreign bank accounts.
• Form 16/16A: TDS certificates for salary and other incomes.
• Form 26AS and AIS: For verifying financial transactions and tax credits.
• Property Documents: Required when you claim tax deduction under section 24(b).
• Form 10F and Tax Residency Certificate (TRC): For claiming DTAA benefits.
• Foreign Income Details: It includes salary slips and tax returns from the residence country.

These are the documents NRIs need to submit when filing their ITR in India. Moving on, let's look at the steps to file an ITR. 

Step-by-Step Guide to File ITR for NRIs

Here is how NRIs online can file ITR in India:

• Step 1: If you are a new user, before filing ITR, you need to register on the income tax website. In case you already have an account on the site, use your credentials to log in to the portal. For this, you need to mention your PAN/ Aadhaar number and password.
• Step 2: On the portal, click e-File> Income Tax Returns> File Income Tax Return.
• Step 3: Choose the Assessment Year, i.e., 2026-27, and the mode of ITR filing as online, then click on the continue option.
• Step 4: In case you have already filled out the income tax form and it is pending for submission, then click on the "resume filing" option. However, if you want to prepare a new return, click on the Start New Filing option.
• Step 5: From the given options (individual/ HUF/ other), choose the applicable status, and to proceed further, click on the continue option. 
• Step 6: As per your salary income type, choose the ITR form, i.e., ITR 2/ ITR 3, and click on the proceed option.
• Step 7: Once you have chosen the correct ITR form, gather all the requested documents mentioned in it. After that, click on the "Let's Get Started" option.
• Step 8: As per your ITR filing reason, choose the applicable check box and click on continue.
• Step 9: For AY 2026-27, under the tax regime, the New Tax Regime is the default option. Considering this, for the question, "If you want to opt out of the New Tax Regime," the "No" option will be selected automatically. Additionally, if you want to file your ITR under the old tax regime, under the personal information section, select "yes." Check your pre-filled information. Mention the additional/ remaining data (if needed). At the end of every section, click on "confirm."
• Step 10: In the different sections, mention/ edit the details of your income and deductions. After filling out all the sections of the form, click on the "proceed" option.
• Step 10 (a): In case you have a tax liability, click on the tax liability option. Once you click on this option, based on the information you provided, you will see the summary of the tax computation. If there is a tax liability that you need to pay, at the bottom of the page, you will get two options. These are: Pay Now and Pay Later. You choose one as per your preference. 
• Step 10 (b): In case you do not have any tax liability or have a refund, click on the "preview return" option. In case you do not have both things, you will be moved to the "preview and submit your return" page option.
• Step 11: Once you go to the "preview and submit your return" page, click on the declaration checkbox and click on the "proceed to validation" option. 
• Step 12: After the internal validation is successful, click on the "preview" option.
• Step 13: Now, click on the preview of the return and proceed to the validation option.
• Step 14: With the upload level validation, once the ITR return is validated successfully, click on the "proceed to verification" option.
• Step 15: You will be directed to the "complete your verification page." From the list of options, select your preferred one and click on continue.
• Step 16: Choose the e-verification option from the e-verify page to check your ITR filing, and click on the continue option. Once the e-verification is done, on the page, you will see a success message along with your acknowledgment number and transaction ID. Additionally, a confirmation message will be sent to your mobile number and email ID.

This is how you can file your ITR online in India. Additionally, the process of ITR filings for NRIs and Indian residents is the same.

Conclusion

This was your complete guide for ITR filings for NRIs in AY 2026-27. Hope that after reading it, all your doubts will be clear. However, if you are still confused and need help with your ITR filing, contact Savetaxs. We have a team of professionals who can guide you in filing your ITR as an NRI. Additionally, the expert can also assist you with better tax planning.