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 (₹3,00,000 for most NRIs 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.

Form 67: The Foreign Tax Credit Claim (File First!)

If you paid income tax abroad (e.g., Polish PIT, Dutch income tax, UK PAYE) and want to claim Foreign Tax Credit (FTC) against your Indian tax liability, you must file Form 67 before or simultaneously with your ITR — not after. Key points:

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.
Deadline: Form 67 must be filed by the ITR due date (July 31 for non-audit cases). If filed late, the FTC claim is disallowed — this is a strict rule with no easy remedy.

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

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.
File Form 67 before or alongside ITR (via e-File → Income Tax Forms → File Income Tax Forms → Form 67).
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).
Complete the NRI-specific schedules: FSI, FA, TR. These are not pre-filled and require manual entry.
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.
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.