Income Tax: NRI ITR Filing Checklist 2025

As the financial year 2024-2025 income tax filing season approaches, it is important for Non-Resident Indians (NRIs) to be properly prepared by having the appropriate documents available and a reasoned understanding of the tax rules that apply to them in 2025. Having the correct documentation allows for a seamless filing process.

The following documents should be prepared by the NRI:

A PAN card, a valid visa or documents to prove overseas residency, and personal bank statements (NRE, NRO, savings) for the period from April 2024 to March 2025. NRIs also must develop any required interest certificates, capital gains reports, dividend statements, and investment proofs such as 80C, 80D, 80G, etc., to claim deductions.

For NRIs wishing to leverage the benefits of the Double Taxation Avoidance Agreement (DTAA) that India has in place with countries in which they reside, only the Tax Residency Certificate (TRC) and Form 10F are missing. If the NRI is a salaried employee, keep a copy of the salary statement (Form 16) prepared by the employer.

There are several important points NRIs should keep in mind while filing returns. Although NRE and FCNR interest income is exempt from tax, it must still be reported. NRIs should use the ITR-2 form since ITR-1 is not applicable to them. Aadhaar must be linked with PAN, and the bank account should be validated on the income tax portal. Dividend income is taxed at 20% under Section 115A unless relief is provided under a DTAA. Moreover, the Section 87A rebate is not available to NRIs.

Certain common mistakes can lead to issues with tax filing. NRIs often forget to report Indian income that already has TDS deducted. Errors in AIS/TIS reports should not be overlooked and must be disputed if incorrect. Failure to disclose Indian assets or liabilities, especially when total income exceeds Rs 1 crore, is another frequent error. Additionally, using an incorrect email or mobile number on the IT portal can cause communication issues.

Determining NRI residency status is also crucial. An individual is considered an NRI if they stayed in India for less than 182 days during the fiscal year and for less than 60 days in that fiscal year while also staying in India for less than 365 days over the preceding four fiscal years.

Lastly, under the deemed residency rule, an Indian citizen who earns more than Rs 15 lakh from Indian sources and is not liable to pay tax in any other country will be treated as a resident but not ordinarily resident (RNOR).