ITR Filing 2025: NRIs Can Skip ITR Filing In THESE Conditions
Have you ever struggled to file your ITR in India? If you’re an NRI, dealing with the process might seem like getting lost in a complicated maze in another country. On top of it, you are juggling between time zones, currency conversion and whatnot!
But what if we tell you there are certain ways to not file your Income Tax Return (ITR) for 2025 in India? That’s right—you read what we said! There’s a provision in the Income Tax Act that not many people know about, which could exempt you from having to file. Intrigued? We’ll discuss the special taxation regime for non-residents in Chapter XII-A of the Income Tax Act, 1961 and will explain how it can make income tax return filing easy for NRIs in 2025.
Who is an NRI?
Before jumping to the details, let’s understand who is in an NRI as per the Income Tax Act:
An NRI is an Indian citizen who is living outside India for a major part of the year, whether for work, business or for any other reason.
According to the Income Tax Act of 1961, you are an NRI if you do not stay in India for a year (April 1 to March 31); here’s how it goes:
- You do not stay in India for more than 182 days throughout the financial year.
- Within the last 4 years, you’ve spent at least 365 days abroad and have spent fewer than 60 days in India during the current financial year.
Let’s understand with an example:
An Indian citizen living in Dubai and did not spend at least 100 days in India during 2024–25, you are an NRI.
If you reside in India for 200 days or more, you will be deemed a resident of India for tax purposes unless other conditions apply.
What are the Special Tax Provisions for NRI?
You can skip filing an ITR if you check a few required boxes. There are strict rules that you must adhere to. The following are the conditions:
Interest
For example, you earn interest on a Non-Resident External (NRE) account; that interest is not taxable. However, if you are earning interest from an NRO (Non-Resident Ordinary) account, that’s taxable income.
TDS (Tax Deduction at Source)
If the bank or the company is paying you after deducting TDS from your income, you are relieved from the liability of filing ITR unless you don’t want to claim refunds.
Other Income
If you also have an income from India, such as freelancing, rent from a property or salary from a company in India, you are liable to fill an ITR.
Claimable TDS
If you want to get a refund of TDS because your tax liability is lower, then you need to file an ITR.
How to File ITR Easily in 2025: Step-by-Step Guide for NRIs
If you are required to file ITR in 2025, the process is much simpler than ever. Here’s a quick checklist to help you:
Gather Documents: PAN, Aadhaar card, bank statements, Form 16 (if salary income), Form 26AS (tax credit statement), and investment proofs.
Log in to the e-Filing Portal: Use your credentials and log in to your profile.
Choose the Correct ITR Form: Usually, ITR-2 or ITR-3 for NRIs, depending on your income type.
Fill Income Details: A lot of information would be auto-populated, but you should verify them carefully.
Declare Foreign Income: Enter foreign income and taxes paid, if applicable.
Upload Digital Signature or Aadhaar OTP: To authenticate your filing.
Submit and Verify: Use online OTP and e-Verification to submit your income tax filing successfully.
Track Refunds or Processing Status: Check the status of your ITR filing or refunds periodically on the portal.
Common Mistakes to Avoid
It’s not always easy for NRIs to file their taxes. Here are some things you should avoid:
Exemption limit: If you haven’t reached the exemption limit but want to get a refund or carry forward your losses, you should file a return.
No TDS: If your income source does not come under the specified asset or no TDS was deducted, the special regime for NRIs won’t apply, and you need to file an ITR.
Not using DTAA advantages: If India has a Double Taxation Avoidance Agreement (DTAA) with your home country, it may help you pay less tax. Check if you can claim credits for taxes paid abroad.
Late filing: If you miss the ITR filing deadline, you will face penalties and interest. Mark the date in your calendar.
Final Words
All in all, you may be able to avoid filing an ITR in 2025 if you are an NRI. The special income tax regime under Chapter XII-A is a boon for NRIs with income from certain classes of assets, and TDS deducted income. However, it does not cover all the income sources; do check if you meet the requirements laid out. You can also seek help from tax experts and CA.
In case you own a business in India and are looking for a simple solution to stay compliant with GST regulations, we highly recommend you try Munim GST Return Filing software with 60 days of free trial. It has everything you need to stay compliant.
Frequently Asked Questions
Do NRIs need to file ITR?
If they hold or earn through a certain class of assets, they need to file an ITR.
Can NRIs file ITR 1?
No, NRIs cannot file ITR-1.
Which ITR form to fill for NRI?
Any NRI who receives income from salary, pension, or capital gains and does not have business earnings typically files ITR-2. When you have income from a business or a profession, you should file ITR-3.
