NRI Taxation and Compliance (Part 9): Filing Returns, Claiming Refunds and Handling Notices
When NRIs must file ITR, which form to use, e-verification, TDS refund to NRO account, treaty relief and how to respond to income tax notices.
An NRI earns rent and NRO interest in Hyderabad. The bank deducts 30% TDS on interest, the tenant deducts on rent, and the NRI believes “TDS is final”. Two years later a notice says income was not reported, and a refund he was entitled to was never claimed.
- Part 1: Residential status
- Part 2: Income taxation
- Part 3: Property
- Part 4: Banking and investments
- Part 5: Returning to India
- Part 6: Investing in Indian businesses
- Part 7: Gifts, inheritance and succession
- Part 8: TDS, Section 195 and Forms 15CA/15CB
- Part 9: Return filing, refunds and notices (you are here)
1. Do you need to file?
| Situation | Return needed? (confirm limits for the tax year) |
|---|---|
| Indian income above the basic exemption limit | Yes |
| Capital gain on property or shares, even with TDS deducted | Yes, to reconcile TDS and claim any refund |
| TDS deducted but the real tax is lower | Yes, to claim the refund |
| Only NRE and FCNR(B) interest (exempt) and no other income | Generally no, but keep the record |
| Loss to carry forward (capital loss) | Yes, on time, to carry the loss forward |
| Income tax notice received | Yes, respond as required |
2. Choosing the form and the dates
| Item | Position (confirm) |
|---|---|
| Typical form | ITR-2 for individuals with capital gains and no business; ITR-3 where business or profession income exists |
| Due date | 31 July of the assessment year for non-audit individuals; 31 October where audit applies |
| Belated return | Allowed up to the late filing date with fee and interest; some losses cannot be carried forward if late |
| Updated return | Can be filed within the permitted period with additional tax (confirm current period) |
| Verification | E-verify within 30 days of filing by Aadhaar OTP, net-banking or other methods; an NRI without Aadhaar can use digital signature or send ITR-V (confirm) |
| Schedule FA | Not required for NRIs: it applies to residents (confirm) |
3. Relief from double tax
| Question | Answer |
|---|---|
| How does an NRI get treaty relief in India? | Claim the treaty rate through TRC and Form 10F at the TDS stage, and in the return under the relevant schedule |
| Who gives credit for Indian tax abroad? | Your country of residence, under its own foreign tax credit rules. Keep Indian tax receipts and Form 16A |
| Is Form 67 for NRIs? | Form 67 is for claiming foreign tax credit by residents in India (confirm); an NRI claims credit in the foreign country |
ComplianceKart prepares and e-files the NRI return, reconciles TDS with AIS and Form 26AS, claims the refund and handles notices. See our income tax return service.
4. Refunds: how they work
- File the return with correct bank details. The refund goes to a pre-validated bank account in India (NRO), not to a foreign account.
- E-verify within the time limit. An unverified return is invalid.
- Reconcile TDS with Form 26AS and AIS. Ask the deductor to correct mismatches in the TDS return.
- Track the status on the portal, reply to any intimation under Section 143(1) within the time given.
- Move the refund onwards through NRO channels subject to the USD 1 million repatriation limit (Part 7).
5. Notices NRIs commonly receive
| Notice or intimation | Usual reason | Response |
|---|---|---|
| Section 143(1) intimation | Mismatch with TDS or income in AIS | Review, file a rectification or accept; check refund adjustment |
| Defective return notice | Missing schedule or verification | Correct within the time given |
| Scrutiny notice (143(2)) | Selected for assessment: capital gains, large deposits, high refund | Prepare a documented reply with purchase deeds, bank statements, valuation proofs |
| Reassessment notice | Income alleged to have escaped assessment | Check the time limits and the reasons; reply on jurisdiction and merits (litigative; confirm) |
| Demand notice | Tax, interest or fee outstanding | Verify the demand, pay or file an appeal or a stay request within the time |
Replies must be filed on the portal within the time given. Appeals lie to the Commissioner (Appeals) within 30 days of the order, and a stay application should accompany the appeal when a demand is large (confirm current procedure).
6. Mistakes NRIs make
- Assuming TDS is full and final and never filing a return.
- Reporting residential status wrongly on the return.
- Choosing a foreign bank for refund and having it rejected.
- Ignoring AIS differences until a notice arrives.
- Missing e-verification and losing the return.
- Not claiming treaty relief on dividends or interest.
Why work with ComplianceKart
ComplianceKart is a boutique practice bringing Chartered Accountants, Company Secretaries and advocates under one roof. Think of a multi-speciality hospital: the physician, the radiologist and the pharmacist read from one patient file, so you never carry reports between buildings. Return filing, TDS, FEMA repatriation and notices come from different departments. A multi-disciplinary team keeps the story consistent across all of them.
Frequently Asked Questions
Do NRIs need to file ITR if TDS is deducted?
If income is above the exemption limit, or a refund or loss carry-forward is wanted, yes.
Which ITR form do NRIs use?
Usually ITR-2, or ITR-3 if there is business or professional income.
Where does the refund go?
To a pre-validated bank account in India, usually the NRO account.
Is Schedule FA needed for NRIs?
No, it applies to residents. Confirm if your status changes (see Part 5).
What if I get a notice while abroad?
Reply through the portal with an authorised representative and keep the documents ready.
Sources
- Income-tax Act, 1961 and Income-tax Act, 2025 (return, refund, assessment and appeal provisions; confirm corresponding sections)
- Income-tax Rules (ITR forms, verification, Form 10F) and CBDT notifications on due dates
- Income Tax Department e-filing portal user guides
Ready to act? Start with our income tax return service, check pricing, or contact us.
WhatsApp usEmail team@compliancekart.comCall 9959536391
Educational article, last updated 11 November 2026. General information, not advice on a specific case. Laws and due dates change; confirm on the date you act. Items marked (confirm) came from secondary sources and need checking against the official text.
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