NRI Income Tax Return Filing India 2026: DTAA Relief and Which ITR Form to Use

By Nitish Bharadwaj · Published Aug 31, 2026 · 7 min

NRIs filing an Indian tax return face a different rulebook: only ITR-2 or ITR-3 apply, never ITR-1 or ITR-4, and the Section 87A rebate doesn't apply, so tax is owed from the first rupee above the basic exemption limit. NRE/FCNR interest stays tax-free while NRO interest is taxed with 30% default TDS. To get a lower treaty rate on India-source income instead of that default TDS, NRIs must submit a Tax Residency Certificate and Form 10F to the payer before the transaction. This guide covers the forms, deadlines, and DTAA process for AY 2026-27.

Move from resident to non-resident status and the entire tax rulebook changes underneath you — not just the rates, but which forms you're even allowed to file, which deductions disappear, and how the tax department treats income you're still earning inside India. Most of the confusion NRIs run into at filing time comes from applying resident-year habits to a return that runs on a different set of rules entirely.

Which ITR Form Applies to You

The first difference shows up before you've entered a single number: NRIs cannot file ITR-1 or ITR-4, regardless of how simple their income looks. Both forms are restricted to resident individuals only.

Our guide on ITR-1 vs ITR-2 covers how residents pick between the simpler forms — for an NRI, that choice is already made: neither ITR-1 nor ITR-4 is on the table, no matter how uncomplicated the income is.

The Filing Deadline — And What If You've Already Missed It

For Assessment Year 2026-27 (income earned in FY 2025-26), the due date was July 31, 2026 for NRIs with no tax audit requirement, and October 31, 2026 where one applies. If you're filing after July 31 and haven't yet, you haven't lost the option — a belated return can still be filed under Section 139(4), generally up to December 31 of the assessment year, though it comes with a Section 234F late fee and interest on any unpaid tax.

No Section 87A Rebate for Non-Residents

Resident taxpayers under the new regime effectively pay zero tax up to ₹12 lakh of income because of the Section 87A rebate. That rebate is explicitly unavailable to non-residents — an NRI's tax liability starts from the first rupee above the basic exemption limit, which is ₹2.5 lakh under the old regime and ₹4 lakh under the new regime, with no rebate cushion on top. This is the single biggest gap between how a resident and an NRI experience the same income tax slabs, and it catches people off guard who assume the numbers they remember from before they moved abroad still apply.

NRE, FCNR, and NRO — Not All Accounts Are Taxed the Same

The distinction matters because it's easy to assume every NRI account works the same way. Money genuinely earned and remitted from abroad, parked in an NRE or FCNR account, stays outside the Indian tax net. Money that originates in India — rent, dividends, or interest credited to an NRO account — is fully taxable, with the bank deducting a flat 30% TDS by default, regardless of your actual slab rate. That over-deduction is exactly what DTAA relief exists to reduce.

Claiming DTAA Relief: TRC and Form 10F

To have a bank, tenant, or buyer deduct TDS at a lower treaty rate instead of the default 30% (or the applicable domestic rate), an NRI needs two documents in place before the payment: a Tax Residency Certificate (TRC) issued by the tax authority of the country they're currently resident in, and Form 10F, filed online on the income tax e-filing portal — paper submissions are no longer accepted. Both are typically renewed annually, since a TRC certifies residency for a specific financial year. Submit both to the payer ahead of the transaction; DTAA relief claimed after tax has already been deducted at the higher rate has to be recovered by filing a return and claiming a refund, which is slower and less certain than getting the rate right at source. This TRC/Form 10F route reduces TDS at the Indian end on India-sourced income; if instead you're a resident being taxed on income that arose abroad and was already taxed there, the relief mechanism runs the other way — our Foreign Tax Credit and Form 67 guide covers how that credit is claimed and capped.

Selling Property? Get a Lower Deduction Certificate First

Property sales are where NRIs most often overpay TDS by default. A buyer purchasing property from an NRI seller must deduct TDS under Section 194IA — but for an NRI seller specifically, the deduction applies at a steep flat rate on the entire sale value, not just the gain, unless the seller has proactively applied for a Lower Deduction Certificate under Section 197 before the sale closes. Without it, the NRI seller's money gets locked up in an over-deducted TDS refund claim that can take months to process after filing a return. Applying for the certificate ahead of the transaction is the difference between a smooth settlement and a long wait for a refund.

Deductions That Don't Work the Same Way for NRIs

Several familiar Section 80C options are closed to NRIs entirely — PPF, NSC, and SCSS accounts cannot be opened by non-residents, and an existing PPF account opened while resident can run to its original maturity but not be renewed once your status changes to NRI. That quietly rules out some of the instruments residents lean on most for 80C. ELSS funds, life insurance premiums, and children's tuition fees remain available. Basic exemption limits given to senior citizens don't extend automatically to NRIs either — residential status, not age, decides the exemption slab that applies.

Bottom Line

An NRI return isn't a resident return with a different address — the form you're allowed to file, the rebate you don't get, which accounts stay outside the tax net, and how you get TDS reduced at source instead of refunded later are all governed by a separate set of rules triggered purely by residential status. Get the TRC and Form 10F in place before the money moves, apply for a Lower Deduction Certificate before selling property, and use ITR-2 or ITR-3 depending on whether you have India business income — that covers the mechanics that actually differ from filing as a resident.