Filing taxes in India as an NRI comes with its own maze of rules, forms, and deadlines. Even small errors can cost you in penalties or missed refunds. Here’s your go-to guide to avoid the most common mistakes and stay on the right side of compliance.
💡 Why This Matters
NRIs often juggle investments, property, and income streams in India — and that means dealing with Indian tax laws. Unfortunately, many make avoidable mistakes simply because they’re unaware of the details. This blog will help you steer clear of the most common slip-ups and ensure you file your taxes accurately and confidently.
🔟 Most Common NRI Tax Filing Mistakes
1. Misreporting Residential Status
Your tax liability hinges on your residential status. Many NRIs get this wrong.
👉 If you spend 182 days or more in India in a financial year, or 120 days with income above ₹15 lakh, you may be considered a Resident but Not Ordinarily Resident (RNOR).
📌 Misreporting leads to either overpaying or underpaying taxes — both risky.
2. Using the Wrong ITR Form
Form selection depends on your income sources:
- ITR-2 is usually for NRIs with income from rent, capital gains, or foreign income.
- Using ITR-1 (meant for residents only) leads to rejections.
3. Not Reporting Income from India
Think your NRO interest or rent is too small to disclose? Think again.
Even small amounts like Savings/NRO accounts are taxable in India and must be reported.
4. Missing the Filing Deadline
The due date is usually 31st July (for non-audit cases).
Missing it means:
- Late filing fees (up to ₹5,000)
- Loss of carry-forward benefit on losses
- Delayed refunds
5. Assuming TDS Equals Final Tax
Banks and tenants deduct TDS, but it might not match your final tax liability.
👉 Always recalculate your actual tax payable and file accordingly.
Otherwise, you may overpay and miss refund opportunities — or underpay and invite notices.
6. Ignoring Foreign Asset Disclosure
Even if you’re an NRI, if you qualify as RNOR, you may have to disclose offshore bank accounts, investments, or properties.
Failing to do this invites scrutiny.
7. Skipping DTAA Benefits
India has Double Taxation Avoidance Agreements with 90+ countries.
Failing to claim tax relief under DTAA means double taxation — once abroad, and again in India.
8. Incorrect Bank Details
Many NRIs enter resident account details for refunds, but refunds can only be credited to NRO accounts.
✅ Double-check your account type and IFSC while filing.
9. Overlooking Deductions You’re Eligible For
As an NRI, you’re not eligible for:
- 80C deductions for PPF or NSC
- Senior citizen benefits (even if you’re 60+)
✅ But you can claim:
- Life/health insurance premiums
- Home loan interest (Section 24)
- Tuition fees for children in India (in some cases)
10. Not Filing at All (When You Should)
Even if TDS is deducted or income is low, you must file a return if:
- Your total income in India exceeds ₹2.5 lakh
- You want to claim a refund or carry forward losses
NRI Nivesh: Simplifying Tax for NRIs
At NRI Nivesh, we specialize in:
- End-to-end tax filing for NRIs
- Status classification & DTAA guidance
- Optimized returns & refund tracking
Whether you’re in Dubai, London, or Toronto — we help you stay compliant, informed, and stress-free.
❓Have You Filed Your Taxes Yet?
Drop us a question, or reach out for a free consultation on your filing strategy for FY 2025–26. One mistake today can cost you tomorrow — let us help you get it right.
Avoid the mistakes. Maximize the benefits. File right with NRI Nivesh.
