Most NRIs we onboard arrive with the same three questions: Do I even need to file?, Which ITR form?, and How do I claim DTAA credit without triggering a notice? This guide answers all three for FY 2024-25 (AY 2025-26) — the rules, the forms, and the order of operations a working CA actually follows.
Who must file as an NRI for FY 2024-25
File an ITR in India if any of the following is true for the year:
- Your Indian-source income exceeds ₹2.5 lakh (basic exemption — Section 87A rebate is not available to NRIs).
- You sold Indian property, shares or mutual funds, even at a loss — capital-loss carry-forward needs a filed return.
- TDS was deducted (rent, professional fees, Section 195 on property) and you want a refund.
- You hold a signing authority in any Indian bank account that, with others, exceeded ₹50 lakh aggregate during the year.
Which ITR form — ITR-2 or ITR-3
NRIs cannot use ITR-1 (Sahaj). Default to ITR-2 for salary, rent, capital gains and other-source income. Use ITR-3only if you have business or professional income chargeable in India (e.g. a proprietorship, director's remuneration treated as business income, or F&O trading).
Claiming DTAA relief — the four-document rule
Indian dividend, interest and royalty income is taxable in India but a Double Taxation Avoidance Agreement (DTAA) usually caps the rate at 10–15%. To get the lower rate you need all four documents on file before the payer deducts TDS:
- Tax Residency Certificate (TRC) from your country of residence for the financial year.
- Form 10F filed online on the income-tax portal (mandatory online since FY 2022-23, even for non-PAN holders via the limited-purpose ID).
- Self-declaration of beneficial ownership and no Permanent Establishment in India.
- PAN — or invoke Rule 37BC if PAN is unavailable to avoid 20% TDS.
If the payer has already deducted TDS at the higher domestic rate, the relief is recoverable in the ITR — claim it under Schedule TRand Schedule FSI, and attach the TRC details in the return.
Section 195 TDS when selling Indian property
The buyer of property from an NRI must deduct TDS at 12.5% (LTCG, post-23 July 2024 sales without indexation) or 30% (STCG)on the full sale consideration, not just the gain. This is the single biggest cash-flow shock NRI sellers face.
The mitigant is a Lower / Nil TDS certificate under Section 197:
- Apply before the sale via Form 13 on TRACES; the AO computes expected gain and issues a certificate at the effective tax rate (often 2–4%).
- The buyer must hold a TAN (not just a PAN) and file Form 27Q quarterly — missing this triggers a notice on the buyer, not the seller.
- Repatriation of sale proceeds needs Form 15CA / 15CB from a CA — bank will not release funds without it.
Schedule FA — applies only if you become ROR
If you are NR or RNOR for FY 2024-25, Schedule FA (foreign-asset disclosure) does not apply. It kicks in only the year you become an Ordinarily Resident — when every foreign bank account, brokerage, ESOP, property and life insurance policy must be disclosed. Penalty for non-disclosure is ₹10 lakh per asset per year under the Black Money Act, regardless of income.
FEMA touchpoints most filings ignore
- NRO to NRE transfer needs Form 15CA/CB and is capped at USD 1 million per FY per individual.
- Inherited property sale proceeds are repatriable under the same USD 1 mn limit, but only after the cost basis is established with a registered-valuer report dated 1-Apr-2001 onwards.
- Indian rental income credited to NRO must be tax-paid before repatriation; banks ask for CA certification on the deducted TDS.
Due dates and what to do if you miss them
- 31 July 2025 — non-audit ITR for FY 2024-25.
- 31 October 2025 — audit cases (turnover-based).
- 31 December 2025 — belated / revised return, with ₹5,000 late fee under Section 234F and loss of carry-forward for most heads.
- 31 March 2027 — updated return (ITR-U) with 25–70% additional tax. Useful when foreign income or capital gains were missed.
How an NRI engagement with us actually runs
A typical NRI filing engagement at Aurum Vista takes 7–10 working days from document collection to filed return: residency-status workup, AIS / TIS reconciliation against your Form 26AS, DTAA claim with TRC + Form 10F, capital-gains computation with indexation choice (where pre-23 July 2024 property is involved), and Schedule FSI / TR build-out. Fixed fee, named CA, no end-of-March surprises.