Non-Resident Individuals earning income in India often face confusion around residential status, applicable ITR form, tax regime selection, deductions, surcharge, TDS credit, and refund claims. Taxbrain.in offers professional assistance for NRI income tax return filing for AY 2026-27 so that your return is filed accurately, on time, and in line with the Income Tax Act, 1961.
For AY 2026-27, a Non-Resident Individual generally files ITR-2 when there is no business or professional income, and ITR-3 when business or professional income is involved. The default tax regime continues to be the new tax regime under Section 115BAC, but eligible taxpayers may opt for the old regime subject to the applicable rules.
Who is a Non-Resident Individual?
A Non-Resident Individual is a person who is not a resident in India for tax purposes for the relevant previous year. Residential status is determined under Section 6 of the Income Tax Act, 1961.
An individual is treated as a resident in India in a previous year if either of the following conditions is satisfied:
- He or she is in India for 182 days or more during the previous year.
- He or she is in India for 60 days or more during the previous year and 365 days or more during the 4 years immediately preceding that previous year.
If neither of the above conditions is satisfied, the individual is treated as a non-resident for that previous year.
There are important exceptions for Indian citizens and persons of Indian origin visiting India. In such cases, the 60-day condition is generally replaced by 182 days. However, from AY 2021-22 onward, where such Indian citizen or person of Indian origin has total income exceeding ₹15 lakh, excluding foreign-source income, the 60-day threshold is replaced by 120 days.
Section 6(1A), introduced by the Finance Act, 2020, also provides that an Indian citizen having total income exceeding ₹15 lakh, excluding income from foreign sources, can be deemed resident in India if he or she is not liable to tax in any other country.
Who should use this service?
This service is suitable for Non-Resident Individuals who have any income taxable in India, including:
- Salary received or taxable in India.
- Income from house property in India, including rental income.
- Capital gains from sale of shares, mutual funds, property, or other Indian assets.
- Interest income, including income reflected in Form 16A, AIS, or Form 26AS.
- Business or professional income taxable in India.
- Cases involving TDS deduction and refund claim.
- Cases requiring audit report or special accountant report before ITR filing.
Returns applicable for Non-Resident Individuals
1) ITR-2 for Non-Resident Individuals
ITR-2 is applicable to an Individual or HUF, whether resident or non-resident, having income under any head other than profits and gains of business or profession.
In practical terms, ITR-2 is generally used where the NRI has income such as salary, pension, house property, capital gains, or income from other sources, but does not have business or professional income.
2) ITR-3 for Non-Resident Individuals
ITR-3 is applicable to an Individual or HUF, whether resident or non-resident, having income under the heads salary/pension, house property, profits and gains of business or profession, capital gains, or income from other sources, and who is not eligible to file ITR-1, ITR-2, or ITR-4.
For AY 2026-27, ITR-3 continues to be the relevant return where an NRI has business or professional income in India.
Recent AY 2026-27 reporting changes also indicate that NRIs covered by certain presumptive provisions for non-residents may need separate disclosure of turnover or gross receipts and deemed income in the updated ITR structure.
Important forms and documents for NRI ITR filing
The following forms are commonly relevant for Non-Resident Individuals:
Form 12BB
Form 12BB is submitted by an employee to the employer for claiming TDS-related deductions and exemptions such as HRA, LTC, interest on borrowed capital, and other tax-saving claims.
Form 16
Form 16 is issued by the employer to the employee and contains details of salary paid, deductions or exemptions allowed, and tax deducted at source for computing tax payable or refund.
Form 16A
Form 16A is a quarterly TDS certificate for income other than salary and captures the amount of TDS, nature of payment, and tax deposited with the Income Tax Department.
Form 26AS and AIS
Form 26AS shows tax deducted or collected at source and is available through the e-filing portal.
AIS, or Annual Information Statement, can also be accessed on the income tax e-filing portal and contains a wider set of information, including TDS/TCS details, specified financial transactions, taxes paid, demand or refund, pending or completed proceedings, GST information, and in some cases information received from foreign governments.
Form 10E
Form 10E is used for claiming relief under Section 89(1) where salary is received in arrears or advance, or in cases involving gratuity, termination compensation, or commutation of pension.
Form 3CB-3CD
This audit report is furnished by taxpayers who are required to get their accounts audited under Section 44AB. It is to be furnished one month before the due date for filing the return under Section 139(1).
Form 3CEB
Form 3CEB is required where the taxpayer must obtain an accountant’s report under Section 92E for international transactions or specified domestic transactions. It is also required to be furnished one month before the due date for filing the return under Section 139(1).
Form 3CE
Form 3CE applies where the taxpayer is required to obtain an accountant’s report under Section 44DA in relation to specified income such as royalty or fees for technical services from the Government or an Indian concern.
Due dates for AY 2026-27
For AY 2026-27, the published due dates indicate the following:
- ITR-1 and ITR-2: 31 July 2026.
- ITR-3 and ITR-4 in non-audit cases: 31 August 2026.
- ITR-3 and ITR-4 requiring audit: 31 October 2026.
- Cases requiring transfer pricing report: 30 November 2026.
- Belated return: 31 December 2026.
- Revised return: 31 March 2027.
- Updated return for AY 2026-27: up to 31 March 2031, subject to law and conditions applicable to updated returns.
Tax regime for AY 2026-27
The Finance Act, 2023 amended Section 115BAC to make the new tax regime the default regime for eligible individuals, HUFs, AOPs, BOIs, and artificial juridical persons from AY 2024-25 onward.
Eligible taxpayers can still opt out and choose the old tax regime, but the method and flexibility differ depending on whether the person has business or professional income.
In non-business cases, the option to change the default tax regime can be exercised every year directly in the income tax return, provided the return is filed on or before the due date under Section 139(1).
In cases where the taxpayer has income from business or profession, opting out of the default regime requires filing Form 10-IEA on or before the due date under Section 139(1). The withdrawal and re-entry rules are stricter in such cases, and the option to move back into the default regime after opting out is available only once in a lifetime in a subsequent assessment year for eligible business or professional taxpayers.
Tax slabs for Non-Resident Individuals for AY 2026-27
Old Tax Regime
Under the old tax regime, the slab rates for non-resident individuals are the same irrespective of age.
- Up to ₹2,50,000: Nil.
- ₹2,50,001 to ₹5,00,000: 5% of income above ₹2,50,000.
- ₹5,00,001 to ₹10,00,000: ₹12,500 plus 20% of income above ₹5,00,000.
- Above ₹10,00,000: ₹1,12,500 plus 30% of income above ₹10,00,000.
New Tax Regime under Section 115BAC
- Up to ₹4,00,000: Nil.
- ₹4,00,001 to ₹8,00,000: 5% of income above ₹4,00,000.
- ₹8,00,001 to ₹12,00,000: ₹20,000 plus 10% of income above ₹8,00,000.
- ₹12,00,001 to ₹16,00,000: ₹60,000 plus 15% of income above ₹12,00,000.
- ₹16,00,001 to ₹20,00,000: ₹1,20,000 plus 20% of income above ₹16,00,000.
- ₹20,00,001 to ₹24,00,000: ₹2,00,000 plus 25% of income above ₹20,00,000.
- Above ₹24,00,000: ₹3,00,000 plus 30% of income above ₹24,00,000.
Rebate under Section 87A
The official AY 2026-27 guidance page states that Non-Resident Individuals are eligible for rebate under Section 87A subject to the regime-wise income thresholds and maximum rebate limits shown there.
Under the values shown on that page, the rebate limit is ₹60,000 under the new tax regime where taxable income does not exceed ₹12,00,000, and ₹12,500 under the old tax regime where taxable income does not exceed ₹5,00,000.
Surcharge and cess
Health and Education Cess at 4% is payable on the amount of income tax plus surcharge, if any, under both regimes.
The surcharge rates shown for AY 2026-27 are:
- Up to ₹50 lakh: Nil.
- ₹50 lakh to ₹1 crore: 10%.
- ₹1 crore to ₹2 crore: 15%.
- ₹2 crore to ₹5 crore: 25%.
- Above ₹5 crore: 25% in the new regime and 37% in the old regime.
The same official guidance also notes that the enhanced surcharge of 25% and 37% is not levied on income chargeable under Sections 111A, 112, 112A and dividend income to the extent applicable to non-residents, and in such cases the maximum surcharge on tax payable on those incomes is 15%, except where income is taxable under Sections 115A, 115AB, 115AC, 115ACA and 115E.
Marginal relief
Marginal relief may be available where income just exceeds surcharge thresholds such as ₹50 lakh, ₹1 crore, ₹2 crore, or ₹5 crore, so that the total increase in tax and surcharge does not exceed the amount by which income exceeds the threshold.
The official AY 2026-27 page specifically sets out the marginal-relief rule for the bands above ₹50 lakh, ₹1 crore, ₹2 crore, and above ₹5 crore in the old regime, while the new regime threshold bands stop at ₹2 crore and above.
Deductions and tax benefits available
Deductions under the new tax regime
The official AY 2026-27 NRI guidance page lists a limited deduction under the new regime for Section 24(b), relating to interest paid on housing loan for let-out house property.
For let-out property used for construction or purchase, the actual interest may be claimed without a monetary cap, but any loss under the head “Income from house property” cannot be set off against other heads in Schedule CYLA and cannot be carried forward as stated on the official guidance page.
The details typically required in the ITR for such claim include:
- Whether the loan is taken from a bank or another lender.
- Name of institution, bank, or person from whom the loan was taken.
- Loan account number.
- Date of sanction.
- Total amount of loan.
- Loan outstanding at year end.
- Interest on borrowed capital under Section 24(b).
Deductions under the old tax regime
The old regime allows wider deductions and exemptions than the new regime.
Section 24(b) – Housing loan interest
For self-occupied house property, the upper limit can be ₹2 lakh where the loan is taken on or after 1 April 1999 for construction or purchase of house property.
For repairs, or where specified older conditions apply, the limit can be ₹30,000. For let-out property, actual interest is allowed as per the guidance table.
The official page also lists the supporting information expected in the return, including lender details, loan account number, sanction date, total loan, outstanding balance, and interest amount.
Section 80C, 80CCC and 80CCD(1)
The combined deduction limit for eligible investments and payments under Sections 80C, 80CCC and 80CCD(1) is ₹1,50,000 as per the guidance table shown on the official page.
Eligible items listed include life insurance premium, provident fund, subscription to certain equity shares, tuition fees, National Savings Certificate, housing loan principal, annuity plans of LIC or another insurer toward pension scheme, and pension scheme of Central Government.
Where deduction is claimed under Section 80CCD(1) or 80CCD(1B), the taxpayer should provide the amount of contribution and PRAN details as specified.
Section 80CCD(1B)
An additional deduction of ₹50,000 is available for contribution to the pension scheme of the Central Government, excluding deduction already claimed under Section 80CCD(1), and the page also notes that this can include contribution to the account of a minor by the parent or guardian under eligible conditions.
Section 80D
Section 80D covers deduction for health insurance premium and preventive health check-up.
The limits shown include ₹25,000 for self, spouse, or dependent children, increased to ₹50,000 where any such person is a senior citizen, and ₹25,000 for parents, increased to ₹50,000 where any parent is a senior citizen. A preventive health check-up limit of ₹5,000 is included within the overall limits.
The page also allows deduction for medical expenditure incurred on a senior citizen where no premium is paid for health insurance coverage, up to ₹50,000 for self/family and ₹50,000 for parents, subject to conditions.
For claiming Section 80D, the details required include name of insurer, policy number, and health insurance amount.
Section 80E
Section 80E allows deduction for interest paid on loan taken for higher education of self or relative.
The official page states that taxpayers should provide lender name, institution or bank, loan account number, date of sanction, total loan amount, loan outstanding at year end, and interest amount under Section 80E.
Section 80EE
A deduction up to ₹50,000 is listed for interest on loan taken for acquisition of residential house property where the loan is sanctioned between 1 April 2016 and 31 March 2017, subject to conditions.
The page also lists lender details, loan account number, sanction date, total loan, outstanding amount, and interest under Section 80EE as required information.
Section 80EEA
A deduction up to ₹1,50,000 is listed for interest on loan for first-time acquisition of residential house property where the loan is sanctioned between 1 April 2019 and 31 March 2022, subject to the conditions stated on the page.
The official guidance also notes that deduction under Section 80EEA can be claimed only if the limit under Section 24(b) is exhausted, and either Section 80EE or Section 80EEA may be claimed depending on sanction date and other eligibility conditions.
The data fields listed include stamp value of the house property, lender details, loan account number, date of sanction, total loan, outstanding loan, and interest under Section 80EEA.
Section 80EEB
A deduction up to ₹1,50,000 is available on interest paid on loan taken for purchase of an electric vehicle where the loan is sanctioned between 1 April 2019 and 31 March 2023, subject to conditions.
The listed details include lender name, account number, sanction date, total loan amount, outstanding balance, interest amount, and vehicle registration number.
Section 80G
Section 80G covers donations to certain funds and charitable institutions.
The official guidance notes categories such as 100% deduction and 50% deduction, with or without qualifying limit, and also states that no deduction is allowed for donation made in cash exceeding ₹2,000.
Section 80GG
Section 80GG allows deduction for rent paid for house where HRA is not part of salary.
The deduction is the least of rent paid minus 10% of total income before this deduction, ₹5,000 per month, or 25% of total income before this deduction. The official page also states that filing Form 10BA and mentioning its acknowledgement number in Schedule 80GG is mandatory.
Section 80GGA
Section 80GGA covers donations made for scientific research or rural development to eligible institutions or funds, subject to conditions.
The page states that no deduction is allowed if donation in cash exceeds ₹2,000 or if gross total income includes income from profits and gains of business or profession.
Section 80GGC
Section 80GGC allows deduction for contribution to a political party or electoral trust, but no deduction is allowed where the contribution is made in cash.
Section 80IA
Section 80IA covers deduction in respect of profits of certain undertakings referred to in Section 80-IA(4)(iv), such as power-related infrastructure, subject to conditions and time limits stated in the official guidance.
Section 80IB
Section 80IB covers eligible profits and gains from specified industrial undertakings and activities, including some mineral oil, housing project, food processing, storage, and transport businesses, subject to specific conditions and approval windows.
Section 80IE
Section 80IE provides deduction to certain undertakings set up in North-Eastern states, generally 100% of profits for 10 assessment years subject to specified conditions.
Section 80JJA
Section 80JJA covers profits and gains from the business of collecting and processing biodegradable waste and provides 100% deduction of profits for 5 assessment years, subject to conditions.
Section 80JJAA
Section 80JJAA allows deduction in respect of employment of new workers or employees for assessees to whom Section 44AB applies, generally 30% of additional employee cost for 3 assessment years, subject to conditions.
Section 80TTA
Section 80TTA allows deduction on interest received on deposits in savings bank accounts by an individual, other than a senior citizen, or HUF, up to ₹10,000.
Documents checklist for NRI return filing
To prepare and file your return smoothly, keep the following ready:
- PAN and Aadhaar, wherever applicable.
- Passport, visa, travel history, and stay details to determine residential status.
- Form 16, Form 16A, Form 26AS, and AIS.
- Salary slips and employment details, if salary income is involved.
- Rent agreement, tenant details, municipal tax, and housing-loan interest certificate for house-property income.
- Capital gains statements from broker, mutual fund, or property-sale documents.
- Bank statements and interest certificates.
- Details of deductions claimed under old regime, with proof.
- Audit report or accountant report, where applicable.
- Details of taxes paid, self-assessment tax, advance tax, refund, or demand.
Why choose Taxbrain.in for NRI ITR filing?
Taxbrain.in can help you determine the correct residential status, choose the correct ITR form, compare old and new tax regimes, verify AIS and Form 26AS, compute eligible deductions, match TDS credits, and file the return accurately within the due date.
This is especially useful for NRIs who have multiple income sources in India, refund claims, property income, capital gains, business income, or form-based compliance such as Form 10E, Form 10-IEA, Form 3CB-3CD, Form 3CEB, or Form 3CE.
Our service includes
- Residential status review under Section 6.
- Review of salary, house property, capital gains, interest, and business income.
- Selection of ITR-2 or ITR-3 as applicable.
- Regime selection support between old and new tax regime.
- Review of Form 16, Form 16A, AIS, and Form 26AS.
- Deduction review and documentation guidance.
- TDS mismatch and refund assistance.
- Filing support for audit-linked and accountant-report-linked cases.
- Support for belated, revised, and updated return situations, where applicable.
Frequently Asked Questions
Which ITR form should an NRI file for AY 2026-27?
An NRI generally files ITR-2 where there is no business or professional income, and ITR-3 where business or professional income is involved.
Is the new tax regime compulsory for NRIs?
The new tax regime is the default regime, but eligible taxpayers can opt for the old regime subject to the applicable rules.
Can an NRI choose the old regime every year?
In non-business cases, the regime option can be changed every year in the ITR if the return is filed within the due date under Section 139(1). In business or profession cases, Form 10-IEA is required and the switching rules are more restrictive.
Are NRIs eligible for rebate under Section 87A?
The AY 2026-27 official guidance page states that Non-Resident Individuals are eligible for rebate under Section 87A within the regime-wise limits and income conditions specified there.
Is Form 26AS enough for filing the return?
No. Form 26AS is important, but AIS may contain wider information such as specified financial transactions, tax payments, refund or demand details, proceedings, GST information, and even information received from foreign governments.
Can an NRI claim deductions under Section 80C and 80D?
The official AY 2026-27 page lists these deductions under the old tax regime for Non-Resident Individuals, subject to eligibility and documentation.
What is the due date for NRI ITR filing for AY 2026-27?
For AY 2026-27, ITR-2 is due by 31 July 2026, while ITR-3 non-audit cases are due by 31 August 2026 and audit cases by 31 October 2026, based on the published due-date guidance.
Can Taxbrain.in help with NRI tax refund claims?
Yes. Refund claims usually require accurate reporting of income, TDS, taxes paid, and reconciliation with Form 26AS and AIS.