Last reviewed: 25 September 2026. Update: the 31 July 2026 (ITR-1/2) and 31 August 2026 (non-audit ITR-3/4) due dates have both passed. Belated returns remain open until 31 December 2026 (fee under Section 234F and interest under Section 234A apply); audit cases file by 31 October 2026; revised returns can be filed until 31 March 2027. Most NRI tax notices do not come from complex planning. They come from small filing gaps: a mismatched TDS entry, unreported NRO interest, or a property sale where the buyer deducted at the wrong rate. This checklist-style guide gives you the documents to gather and the common mistakes to avoid so your AY 2026-27 return is clean. AY 2026-27 (FY 2025-26) returns are governed by the Income-tax Act, 1961, so the 1961 section numbers are used below; transactions from 1 April 2026 fall under the Income-tax Act, 2025, where noted.
At a glance
Step one: residential status for FY 2025-26
Everything else depends on this. Count your days in India from the passport and apply the tests in order:
| Test | Condition | Result |
|---|---|---|
| Basic 182-day test | In India for 182 days or more in the year | Resident |
| 60-day + 365-day test | 60 days in the year and 365 days in the preceding four years. For an Indian citizen or person of Indian origin visiting India, and a citizen leaving for employment abroad, 60 days is replaced by 182 days | Resident if met |
| 120-day test | Citizen or PIO visiting India with Indian income (other than from foreign sources) above Rs 15 lakh: 120 days in the year and 365 days in the preceding four years | Resident but not ordinarily resident (RNOR) |
| Deemed resident | Indian citizen with Indian income above Rs 15 lakh who is not liable to tax in any other country because of domicile or residence | Deemed resident, treated as RNOR |
| None of the above | Days below the thresholds | Non-resident |
The same tests continue under the Income-tax Act, 2025 for tax year 2026-27.
Documents checklist
- Passport pages showing days of stay in India during FY 2025-26.
- PAN, and NRO/NRE bank details for the refund.
- Form 26AS, AIS and TIS: reconcile every entry.
- NRO interest and TDS certificates (Form 16A) from banks.
- Capital gains statements for shares, mutual funds and redemptions.
- For a property sale: purchase deed, sale deed, gain computation and the buyer's TDS challan.
- Tax Residency Certificate and Form 10F if claiming DTAA relief.
Common mistakes that trigger notices
| Mistake | What happens | Fix |
|---|---|---|
| Not filing because TDS was deducted | Refund lost; AIS shows unreported income | File ITR-2 and claim the refund |
| NRO interest not reported | AIS mismatch notice | Report gross interest, claim TDS credit |
| NRE interest shown as taxable, or not shown at all | Tax overpaid, or a mismatch query | Report it as exempt income while you are non-resident under FEMA |
| Buyer deducts TDS on full sale value | Excess cash blocked | Obtain a lower-deduction certificate before the sale. For FY 2026-27 sales this is section 395(1)(a) of the 2025 Act (old section 197), and the buyer deducts under section 393(2) (old section 195) |
| Claiming the 87A rebate | Rebate disallowed at processing (adjustment under section 143(1)); demand raised | Compute without the rebate |
| DTAA without TRC/10F/67 | Foreign tax credit disallowed | Keep TRC, file Form 10F and Form 67 |
Worked example: the refund most NRIs leave behind
An NRI earns Rs 3,00,000 of NRO fixed-deposit interest in FY 2025-26 and has no other Indian income. The bank has no TRC on file.
| Item | Amount |
|---|---|
| TDS deducted by the bank at 31.2% (30% + 4% cess) | Rs 93,600 |
| Tax on slab basis, new regime (nil up to Rs 4 lakh) | Nil |
| Tax at the treaty rate, if 15% applied instead | Rs 45,000, but the Act gives a lower figure, so the Act applies |
| Refund claimed through ITR-2 | Rs 93,600 |
Even under the old regime (basic exemption Rs 2.5 lakh) the tax would be only Rs 2,600, so the refund would still be about Rs 91,000. Without a return, the whole amount stays with the department. Our NRO vs NRE vs FCNR guide explains how to cut the deduction at source next year.
For the residential-status test, taxable income and TDS mechanics in detail, see our full NRI ITR guide; for selling property, see our NRI property-sale guide. If you are returning to India and will become resident, read our Schedule FA guide before your first resident return, and see our lower-TDS certificate service if a property sale is planned.
Frequently asked questions
What documents does an NRI need to file the ITR?
Passport (to establish days of stay), PAN, NRO/NRE bank details, Form 26AS and AIS, NRO interest and TDS certificates, capital gains statements, property documents for any sale, and a TRC and Form 10F if claiming DTAA relief.
Why is the passport a key document?
Because residential status, the basis of everything, depends on your days in India. The passport stamps are the primary evidence of that count for the year.
What are the most common NRI filing mistakes?
Not filing because TDS was deducted, not reporting NRO interest, letting a property buyer deduct TDS on the full sale value, claiming the 87A rebate (not available to non-residents, so it is disallowed at processing and a demand is raised), and claiming DTAA relief without the TRC, Form 10F and Form 67.
Should an NRI file even if TDS is already deducted?
Usually yes. TDS is often higher than the actual liability, so filing produces a refund. Filing also lets you carry forward losses and keep a clean record.
How do I avoid an AIS mismatch notice?
Download the AIS and Form 26AS and reconcile every entry (interest, dividends, property, TDS) against your own records before filing. Most NRI notices come from omitted AIS items.
What TDS issues are specific to NRIs?
NRO interest suffers around 31.2% TDS, and property buyers deduct TDS on payments to non-residents, often on the whole sale value. For sales in FY 2026-27 this is section 393(2) of the Income-tax Act, 2025 (old section 195). A lower-deduction certificate under section 395(1)(a) (old section 197) can reduce blocked cash on property sales.
Do NRIs get the basic exemption and 87A rebate?
NRIs get the basic exemption but cannot adjust it against certain special-rate capital gains, and the Section 87A rebate is not available to non-residents.
Which bank account is used for the refund?
Usually your NRO account. Ensure the account is pre-validated on the portal so the refund is not held up.
I filed my AY 2026-27 return but made a mistake. Can I still correct it?
Yes. A revised return for AY 2026-27 can be filed up to 31 March 2027, or before the assessment is completed, whichever is earlier. If you have not filed at all, a belated return is open until 31 December 2026, with the late fee under section 234F.
Is NRE interest reported in the ITR?
NRE interest is exempt while you are a person resident outside India under FEMA, so it is not taxed. It is shown as exempt income in the return, and it becomes taxable once you return and become resident, so the account should be redesignated.
How is residential status decided if I visited India for about four months?
For an Indian citizen or person of Indian origin visiting India, the 60-day test is replaced by 182 days, except where Indian income (other than from foreign sources) exceeds Rs 15 lakh. Then 120 days in the year plus 365 days in the preceding four years makes you resident, but not ordinarily resident.
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