Income Tax Guide for NRIs (AY 2026-27)
For Non-Resident Indians, Indian income tax turns on two questions: are you a resident or a non-resident this year, and which of your income is connected to India? This guide covers the basics for Assessment Year 2026-27 (FY 2025-26) — and is honest about what MyTaxLocker can and cannot yet do for NRI returns.
Residential status comes first
Your tax obligations depend on whether you're a Resident, Resident but Not Ordinarily Resident (RNOR), or Non-Resident for the year — determined mainly by the number of days you spent in India. A resident is taxed on worldwide income; a non-resident is taxed only on India-connected income. Get the basics in NRI income tax basics, which explains the day-count tests in plain English.
What income is taxable in India
As a non-resident, only income earned, accrued or received in India is taxed here. In practice that usually means:
- Salary for work performed in India.
- Rent from property situated in India.
- Capital gains on Indian assets — shares, mutual funds, property.
- Interest from Indian accounts — NRO interest is generally taxable; NRE and FCNR interest is generally exempt while you remain an NRI.
Your foreign salary and foreign investments are generally outside India's net while you're a non-resident.
TDS on NRI income
NRI income is often subject to TDS at source — and the rates can be higher than for residents (for example on rent, or on capital gains and certain payments). Because TDS may exceed your actual liability, NRIs frequently file a return to claim a refund. Always reconcile what was deducted against your Form 26AS and AIS on the portal before you prepare anything.
A brief note on DTAA
India has Double Taxation Avoidance Agreements (DTAAs) with many countries, which can reduce or eliminate double tax on the same income — typically via a lower TDS rate or a foreign tax credit. Claiming DTAA relief usually needs a Tax Residency Certificate and Form 10F. The mechanics are country-specific and beyond this overview; we mention it so you know the relief exists.
Which ITR an NRI usually files
Non-residents cannot use ITR-1. Most NRIs file ITR-2, since they commonly have capital gains, more than one income source, or foreign-asset reporting. NRIs with presumptive business income might use ITR-3 or ITR-4 depending on the facts. To see why ITR-1 is off the table, read ITR-1 vs ITR-4 and capital gains: which ITR.
Where MyTaxLocker fits — and where it doesn't
To be clear: MyTaxLocker currently prepares ITR-1 and ITR-4 JSON only. Since most NRI returns are on ITR-2, the app generally cannot yet prepare an NRI return. If your only India income happens to fit ITR-4 (presumptive) and you meet every condition, that path exists — but for the common NRI case you'll need ITR-2 on the official portal or a professional's help. We'd rather tell you that up front than overstate what the app does.
Frequently asked questions
What income is taxable in India for an NRI?
For a non-resident, only income that is earned, accrued or received in India is taxable in India. That typically includes salary for work done in India, rent from Indian property, capital gains on Indian assets, and interest from Indian bank accounts (NRO interest is generally taxable; NRE and FCNR interest is generally exempt while you remain an NRI). Foreign income is generally not taxable in India for a non-resident.
Which ITR form do NRIs use?
Most NRIs file ITR-2, because non-residents cannot use ITR-1 and NRIs commonly have capital gains or more than one source of Indian income. NRIs with presumptive business income may use ITR-3 or ITR-4 depending on their situation. The right form depends on your specific income.
Can MyTaxLocker prepare an NRI return?
MyTaxLocker currently supports ITR-1 and ITR-4, which are typically not the forms an NRI needs (NRIs usually file ITR-2). So for most NRI cases the app cannot yet prepare your return. The guidance here is educational; for an NRI return you may need ITR-2 on the official portal or help from a professional.
Resident with a simple salaried return?
If you're a resident with salary income, MyTaxLocker reads your Form 16 and prepares a ready-to-upload ITR-1 JSON for you to upload to the official portal. (NRI / ITR-2 cases are not yet supported.)
Get it on Google Play