NRI Tax Filing in India – Common Mistakes & How to Avoid Them

Introduction

NRIs (Non-Resident Indians) often struggle with filing their Indian income tax returns correctly. With global tax authorities sharing data, compliance is more critical than ever. Here are the most common NRI tax filing mistakes—and how to avoid them.

 Common Mistakes

Wrong Residential Status Declaration

• Declaring yourself as an NRI without meeting the conditions (minimum 182 days abroad).

• Impacts your total taxable income.

 Not Reporting Indian Income

• Rental income, interest from Indian banks, and capital gains from shares must be reported.

 Failing to Claim DTAA Benefits

• DTAA helps avoid double taxation on the same income.

• Requires a Tax Residency Certificate (TRC) and Form 10F.

 Using the Wrong ITR Form

• NRIs must use ITR-2 or ITR-3, not ITR-1—even if income is minimal.

 Ignoring TDS Deductions

• TDS on interest, rent, and sale of property can be as high as 20%+.

• This can be reduced by filing lower/nil deduction certificates (Form 13).

 Best Practices

• Track days spent in India using travel logs.

• Hire a CA familiar with both Indian and foreign tax rules.

• Maintain declarations of foreign bank accounts and assets.

 Conclusion

Filing taxes as an NRI isn't just about paperwork—it's about protecting your wealth and staying compliant in multiple jurisdictions. Our firm helps NRIs from the UK, US, and Australia file accurate and optimized tax returns in India.

 Keywords: NRI Income Tax India, DTAA Filing, ITR for NRIs, Tax for UK Residents in India