Discover who must file ITR as NRI 2025, including income thresholds, tax obligations, exemptions, and filing requirements for Non-Resident Indians in AY 2025-26. Stay compliant with this detailed guide. #Who must file ITR as NRI 2025, #NRI ITR filing 2025-26, #NRI income tax return 2025, #tax slabs for NRIs 2025-26, #NRI ITR exemptions 2025, #ITR forms for NRIs 2025, #NRI tax filing deadline 2025-26, #DTAA benefits for NRIs 2025, #non-resident Indian tax rules 2025.
Introduction
As a Non-Resident Indian (NRI), navigating income tax laws can be challenging, particularly since they change every assessment year. For who must file ITR as NRI 2025, To guarantee compliance with the Indian Income Tax Act, it is essential to comprehend the precise requirements, income thresholds, and exemptions. New tax slabs, filing dates, and forms specifically for non-resident Indians (NRIs) are introduced in the Assessment Year (AY) 2025–2026, which corresponds to the Financial Year (FY) 2024–2025. This comprehensive tutorial provides an answer to the question, who must file ITR as NRI 2025, and gives NRIs all across the world practical information about their tax responsibilities, exemptions, and next steps.
This article will explain when you must submit an Income Tax Return (ITR) in India, which forms to use, and how to take advantage of Double Taxation Avoidance Agreements (DTAAs), regardless of whether you are an NRI residing in the USA, UAE, Canada, or another country. You will have a detailed plan at the end to ensure that you continue to comply with Indian tax rules for AY 2025–2026.
Who Is Considered an NRI for Tax Purposes?
Before diving into who must file ITR as NRI 2025, Knowing who is eligible to be an NRI under the Income Tax Act of 1961 is crucial. An Indian citizen or Person of Indian Origin (PIO) who lives outside of India and satisfies one of the following requirements is known as an NRI:
- Stay in India: During FY 2024–2025, you have been in India for fewer than 182 days.
- Extended Stay Rule: You have visited India for fewer than 60 days in FY 2024–2025 and less than 365 days in the previous four years.
- Deemed Resident Rule: Beginning in FY 2020–21, an Indian national who earns more than ₹15 lakh worldwide (not including income from outside sources) and remains in India for 120–182 days may be classified as a “Not Ordinarily Resident” (NOR). Even though NORs have different tax responsibilities, they could nevertheless have to submit an ITR.
If you meet these criteria, you’re an NRI for tax purposes, and the question of who must file ITR as NRI 2025 depends on your income sourced in India.
Who Must File ITR as NRI 2025?
The Indian Income Tax Act mandates filing an ITR for NRIs based on specific income thresholds and sources. Below are the key scenarios where who must file ITR as NRI 2025 applies:
1. Taxable Income Exceeds the Basic Exemption Limit
If an NRI’s taxable income in India for FY 2024–2025 surpasses the basic exemption threshold, they are required to file an ITR. The new tax regime’s exemption limits for AY 2025–2026 (which have been in effect from FY 2023–2024) are:
- General Taxpayers: ₹3,00,000.
- Senior citizens (60–80 years old): ₹3,00,000 (the new regime does not make a distinction for elderly)
- Super Senior citizens: ₹3,00,000 for super senior seniors (those above 80)
An NRI must file an ITR if, for instance, their rental income in India exceeds the ₹3,00,000 level and they get ₹4,00,000. This answers who must file ITR as NRI 2025 for those with taxable Indian income.
2. Income from Specific Sources in India
NRIs only pay taxes on income that is generated or accumulated in India. Who must file ITR as NRI 2025 includes those with:
- Rental Income: The money received from renting out real estate in India.
- Capital Gains: Capital gains are earnings from the sale of assets in India, such as stocks, mutual funds, or real estate.
- Business Income: Profits from a profession or business that is run in India.
- Interest income: Interest income is earned in India through bonds, savings accounts, and fixed deposits.
- Dividends: Payments made by Indian corporations that are taxed at the source but may need to file an ITR if their total income over the exemption threshold.
If your taxable income exceeds ₹3,00,000 due to any of these sources of income, you fall under who must file ITR as NRI 2025.
3. Claiming Refunds or Carrying Forward Losses
You must file an ITR even if your income is below the exemption threshold if you wish to:
- Claim a tax refund: For excess Tax Deducted at Source (TDS) on income such as interest or rent, you can request a tax refund.
- Carry forward losses: Only by submitting an ITR can capital losses from the sale of stock or real estate be carried forward.
This is a critical point for who must file ITR as NRI 2025, Since many NRIs miss possibilities for refunds when their income is low, they fail to file.
4. Mandatory Filing for High-Value Transactions
Even if income is below the exemption threshold, the Income Tax Department nonetheless needs ITR registration for some high-value transactions. For who must file ITR as NRI 2025, this includes:
- Depositing over ₹1 crore into one or more Indian bank accounts.
- Travelling overseas and spending over ₹2 lakh.
- Paying more than ₹1 lakh in annual electricity bills.
These regulations, which apply to NRIs with substantial financial activity in India, guarantee transparency.
5. Holding Foreign Assets or Income
If an NRI is considered “Resident but Not Ordinarily Resident” (RNOR) or if their Indian income over the exemption threshold, they must file an ITR if they have foreign assets (such as bank accounts, properties, or shares outside of India) or income from foreign sources. Foreign assets must be disclosed in Schedule FA of the ITR form.
This rule broadens the scope of who must file ITR as NRI 2025, especially for high-net-worth NRIs.
Who Is Exempt from Filing ITR as NRI 2025?
Not all NRIs are required to file an ITR. Exemptions apply in the following cases:
- Income Below Exemption Limit: You are exempt if your total taxable income in India is less than ₹3,00,000 and no high-value transactions need you to file.
- TDS Fully Covers Tax burden: If your income is less than ₹3,00,000 and your tax burden is covered by TDS (such as 30% on rent or 20% on capital gains), you might not need to file unless you want a refund.
- No Indian-Sourced Income: You are exempt from filing an ITR in India if you do not have any income from India (for example, 100% of your earnings originate from your home country).
Understanding these exemptions helps clarify who must file ITR as NRI 2025 and avoids unnecessary filings.
ITR Forms for NRIs in AY 2025-26
Choosing the right ITR form is crucial for who must file ITR as NRI 2025. The most common forms for NRIs are:
- ITR-2: For non-resident Indians (NRIs) who receive income from capital gains, salaries, real estate, or other sources (no business income).
- ITR-3: For non-resident Indians (NRIs) who earn money from a company or profession in addition to other sources.
- ITR-1(Sahaj): NRIs rarely use the ITR-1 (Sahaj), which is intended for residents with modest incomes.
To prevent your ITR from being rejected, make sure you choose the appropriate form.
Tax Slabs for NRIs in AY 2025-26
The tax slabs for NRIs under the Old Tax Regime and the New Tax Regime for the Assessment Year (AY) 2025–26, which corresponds to the Financial Year (FY) 2024–25, are shown in the table below. Please take note that the New Tax Regime is the default since FY 2023–2024, and that these slabs are based on the most recent data available as of my knowledge cut-off. If the Old Tax Regime is advantageous to them, NRIs may choose to use it. Tax slabs are subject to change, therefore always check for changes on Budget 2025.
Old Tax Regime
| Income Tax Slab | Income Tax Rate | Surcharge |
|---|---|---|
| Up to ₹2,50,000 | Nil | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% above ₹2,50,000 | Nil |
| ₹5,00,001 – ₹10,00,000 | ₹12,500 + 20% above ₹5,00,000 | Nil |
| ₹10,00,001 – ₹50,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | Nil |
| ₹50,00,001 – ₹100,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | 10% |
| ₹100,00,001 – ₹200,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | 15% |
| ₹200,00,001 – ₹500,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | 25% |
| Above ₹500,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | 37% |
New Tax Regime
| Income Tax Slab | Income Tax Rate | Surcharge |
|---|---|---|
| Up to ₹3,00,000 | Nil | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% above ₹3,00,000 | Nil |
| ₹7,00,001 – ₹10,00,000 | ₹20,000 + 10% above ₹7,00,000 | Nil |
| ₹10,00,001 – ₹12,00,000 | ₹50,000 + 15% above ₹10,00,000 | Nil |
| ₹12,00,001 – ₹15,00,000 | ₹80,000 + 20% above ₹12,00,000 | Nil |
| ₹15,00,001 – ₹50,00,000 | ₹1,40,000 + 30% above ₹15,00,000 | Nil |
| ₹50,00,001 – ₹100,00,000 | ₹1,40,000 + 30% above ₹15,00,000 | 10% |
| ₹100,00,001 – ₹200,00,000 | ₹1,40,000 + 30% above ₹15,00,000 | 15% |
| Above ₹200,00,001 | ₹1,40,000 + 30% above ₹15,00,000 | 25% |
Note: Income subject to tax under sections 111A, 112, and 112A, as well as dividend income, is exempt from the additional surcharge of 25% and 37%. Therefore, unless the income is subject to section 115A, 115AB, 115AC, 115ACA, or 115E, the maximum rate of surcharge on tax that can be applied to such revenues is 15%.
Note: In both regimes, a 4% health and education cess must be paid on top of the income tax plus any applicable surcharge.
DTAA Benefits for NRIs in 2025
To avoid double taxation, India has DTAAs with more than 90 nations. For who must file ITR as NRI 2025, claiming DTAA benefits can lower tax liability. Key points:
- Tax Credit: Deduct taxes paid in your home country from your Indian tax obligation.
- Reduced TDS: By using DTAA, TDS rates on revenue such as royalties or interest can be lowered (for example, from 30% to 10%).
- Form 10F and TRC: To get DTAA benefits, submit Form 10F along with a Tax Residency Certificate (TRC).
To minimise your tax responsibilities, check the DTAA with your home nation.
Key Deadlines for ITR Filing in AY 2025-26
For non-audit instances, the standard date for filing an ITR as an NRI 2025 is July 31, 2025. The deadline is October 31, 2025, if your finances (such as business income) need to be audited. There is a ₹5,000 late filing penalty (or ₹1,000 for income under ₹5,00,000).
How to File ITR as an NRI in 2025
Here’s a step-by-step guide for who must file ITR as NRI 2025:
- Collect the following documents: Bank statements, rent agreements, PAN cards, TDS certificates (Form 16A), and information about overseas assets.
- Choose the Right Form: Based on your sources of income, choose between ITR-2 and ITR-3.
- In the e-Filing Portal, log in: You can access incometax.gov.in by using your PAN.
- Enter ITR information: Enter DTAA benefits, income, and deductions.
- Verify ITR: Verify your ITR by using online banking, Aadhaar OTP, or in-person verification.
- Request Refunds: To complete your refund, supply your bank information.
To ensure compliance in difficult circumstances, seek advice from a tax expert.
Conclusion
For who must file ITR as NRI 2025, If your taxable Indian income is more than ₹3,00,000 or you receive money from high-value transactions, capital gains, or rent, you must file. Make an informed decision between the Old and New Tax Regimes, adhere to the deadline of July 31, 2025, and take use of DTAA benefits to minimise your tax obligation. For a smooth filing procedure, be informed about changes to Budget 2025 and get advice from a tax professional.
FAQs
Q1: Who must file ITR as NRI 2025 if income is below ₹3,00,000?
Unless they have high-value transactions (such ₹1 crore bank deposits) or wish to seek refunds or losses, NRIs with incomes under ₹3,00,000 are exempt.
Q2: In AY 2025–2026, are NRIs eligible to claim deductions under Section 80C?
No, NRIs are not eligible for the majority of resident-specific deductions, such as Section 80C; however, they are eligible for DTAA advantages and some exemptions.
Q3: What happens if an NRI misses the ITR filing deadline for 2025?
In addition to a ₹5,000 penalty (or ₹1,000 for low-income individuals), late filing might result in lost refunds or carryovers.
Q4: Which ITR form should NRIs use for capital gains in 2025?
ITR-2 is excellent for NRIs with capital gains, as it covers income from assets like stocks or property.
Q5: How can NRIs claim DTAA benefits in 2025?
To lower TDS or claim tax credits under DTAA, submit Form 10F together with a Tax Residency Certificate (TRC).
Disclaimer
This article on who must file ITR as NRI 2025 is not intended as expert tax advice; rather, it is for informative purposes only. Tax laws are subject to change, and new regulations might be introduced in Budget 2025. To make sure you are in conformity with the most recent rules for AY 2025–2026, speak with a chartered accountant or certified tax professional.
Also Read: