NRI Tax Filing from Abroad: Step-by-Step ITR-2 Guide

Filing ITR-2 as an NRI: The Complete 2026 Guide

For NRIs with any Indian-source income (NRO interest, rental income, capital gains from India, dividends, pension), filing an Indian income tax return is legally required if that income exceeds the basic exemption limit (₹4,00,000 under the new regime for FY2025-26). Even below the threshold, filing is advisable to establish a compliance record, claim TDS refunds, and maintain accurate DTAA documentation. This guide covers ITR-2, the applicable form for NRIs with salary or non-business income.

Key Schedules NRIs Must Fill

ITR-2 is significantly more complex than ITR-1. NRIs must pay particular attention to these schedules:

• Schedule FSI (Foreign Source Income): Declare all income earned outside India in the relevant financial year. This includes: salary from European employer, interest on foreign bank accounts, dividends from foreign stocks, rental income from overseas property. Report the gross amount, taxes paid abroad, and the country of source. Even if this income is not taxable in India (due to DTAA or NRI status), it must be disclosed.
• Schedule FA (Foreign Assets): Mandatory for all NRIs with any foreign assets — bank accounts, financial interests, immovable property abroad, or signing authority over foreign accounts. Failure to disclose triggers severe penalties under the Black Money Act (up to ₹10 lakh + 90% tax on undisclosed foreign assets). This includes: European bank accounts, stock/investment accounts, property owned in Europe, and any controlled foreign entity.
• Schedule TR (Tax Relief): Claims for DTAA relief and foreign tax credit. References Form 67.
• Schedule AL (Assets and Liabilities): Required if total income exceeds ₹50 lakh — list all assets including Indian property, vehicles, jewellery, and financial assets.

Indian foreign tax credit: form and deadline depend on the year

Indian foreign tax credit is for an Indian resident claiming credit in India for eligible foreign tax on the same income. For years governed by the 1961 Act, Form 67 and evidence are due by the end of the assessment year where the return is filed under section 139(1) or 139(4); filing after the original ITR is not itself disqualifying. For income included in an updated return, submit the related form and evidence on or before that return. For tax years under the 2025 Act / 2026 Rules, use Form 44 (erstwhile Form 67), generally within 12 months after the tax year; check the applicable return-type conditions. Select the form for the income year, not today's date.

• Form 67 is filed online on the Income Tax e-filing portal (incometax.gov.in) under: e-File → Income Tax Forms → Form 67.
• You need: a statement from your foreign tax authority confirming taxes paid (e.g., Polish PIT-11 form, Dutch Jaaropgave, UK P60), translated into English if required.
• The FTC is calculated as the lower of: (a) Indian tax on the doubly-taxed income, and (b) foreign tax paid on that income.
• Indian foreign tax credit is for an Indian resident claiming credit in India for eligible foreign tax on the same income. For years governed by the 1961 Act, Form 67 and evidence are due by the end of the assessment year where the return is filed under section 139(1) or 139(4); filing after the original ITR is not itself disqualifying. For income included in an updated return, submit the related form and evidence on or before that return. For tax years under the 2025 Act / 2026 Rules, use Form 44 (erstwhile Form 67), generally within 12 months after the tax year; check the applicable return-type conditions. Select the form for the income year, not today's date.

ITR-2 Deadlines for NRIs

• July 31: Standard deadline for individuals not requiring audit (most NRIs).
• October 31: If your accounts require audit (typically applicable if you have business income — use ITR-3 in that case, not ITR-2).
• December 31: Belated return — can be filed but with a late filing fee (₹5,000 if income > ₹5L; ₹1,000 if income ≤ ₹5L) and loss of certain benefits (e.g., cannot carry forward capital losses).

How to File from Abroad: Step-by-Step

1. Register/Login at incometax.gov.in using your PAN. Set up Net Banking or Aadhaar OTP for login. If you don't have an Indian mobile for OTP, use the pre-validated bank account EVC (Electronic Verification Code) method — available for NRE/NRO account holders at major Indian banks.
2. Indian foreign tax credit is for an Indian resident claiming credit in India for eligible foreign tax on the same income. For years governed by the 1961 Act, Form 67 and evidence are due by the end of the assessment year where the return is filed under section 139(1) or 139(4); filing after the original ITR is not itself disqualifying. For income included in an updated return, submit the related form and evidence on or before that return. For tax years under the 2025 Act / 2026 Rules, use Form 44 (erstwhile Form 67), generally within 12 months after the tax year; check the applicable return-type conditions. Select the form for the income year, not today's date.
3. Download the pre-filled ITR-2 JSON from the portal — it auto-populates salary, TDS, advance tax, and some financial data from Form 26AS and AIS (Annual Information Statement).
4. Complete the NRI-specific schedules: FSI, FA, TR. These are not pre-filled and require manual entry.
5. Compute tax and verify Form 26AS — ensure all TDS deducted (by banks on NRO interest, by tenants on rent) is correctly reflected. Discrepancies must be resolved before filing.
6. Submit and e-Verify: Use Net Banking EVC via NRE/NRO account, or send a physical ITR-V (signed in blue ink) to CPC Bengaluru by speed post within 30 days of e-filing.

Common Errors NRIs Make

• Filing ITR-1 instead of ITR-2 (ITR-1 is not applicable for NRIs — always use ITR-2 or higher).
• Omitting Schedule FA — even a European current account must be declared.
• Missing Form 67 deadline — losing FTC is an expensive mistake on European-level tax rates.
• Not updating residential status on the portal — select "Non-Resident" explicitly to avoid being assessed as a resident.
• Claiming DTAA benefit without Form 10F — since 2022, Form 10F must be filed electronically before claiming treaty rates.

Use the Tax & DTAA Calculator on NRI Tools to model your Indo-European tax liability, identify treaty benefits available to you, and plan your filing strategy before the July 31 deadline.