Indian expats: Check residency status, choose the right ITR form, and reconcile tax records before the July 31 deadline.
Dubai: UAE-based Indian expats required to file an Indian Income Tax Return (ITR) have until July 31, 2026, to submit their returns for income earned during the 2025–26 financial year. Before filing, they should verify their residential status, select the appropriate ITR form, and ensure their tax records are accurately reconciled to help avoid errors or delays.
The return is for Assessment Year (AY) 2026–27. The Income Tax Department has activated ITR-1, ITR-2, ITR-3 and ITR-4 on its e-filing portal, although most non-resident Indians (NRIs) are expected to file using ITR-2 or ITR-3.
Leaving the filing until the last few days can lead to delays if your Annual Information Statement (AIS), tax records and bank statements don’t match. Documents such as capital gains statements, rental income records and proof of the number of days spent in India may also take time to compile, making early preparation advisable.
To avoid last-minute issues, here are eight key questions UAE-based NRIs should review before filing their ITR.
1. Do I need to file an Indian tax return?
Being a non-resident Indian (NRI) does not automatically exempt you from filing an Indian Income Tax Return (ITR).
You may be required to file a return if your taxable income in India exceeds the basic exemption limit. For the 2025–26 financial year, the threshold is Rs250,000 under the old tax regime and Rs400,000 under the default new tax regime.
However, filing may still be necessary even if your income is below these limits, depending on your financial transactions and tax position. You should also consider filing if you need to:
- Claim a refund of excess Tax Deducted at Source (TDS)
- Report and carry forward eligible capital or property losses
- Declare taxable capital gains
- Correct or update information linked to your Permanent Account Number (PAN)
It’s also important to note that the higher tax rebate available under the new regime does not generally benefit NRIs in the same way it does resident taxpayers. The Section 87A rebate is available only to eligible resident individuals, meaning most NRIs cannot use it to reduce or eliminate their tax liability.
2. What income is taxable for UAE-based NRIs?
India generally taxes NRIs only on income that is received in India, deemed to be received in India, or accrues or is deemed to accrue in the country.
Examples of income that may be taxable in India include:
- Rental income from property located in India
- Interest earned on an NRO account or other taxable deposits
- Capital gains from the sale of Indian property, shares, mutual funds or other assets
- Dividends received from Indian companies
- Income from a business or profession with operations or a connection in India
However, money earned in the UAE and later transferred to India is not automatically taxable simply because it has been remitted. What matters is the source and nature of the income, not where it is transferred.
3. How can I confirm that I was an NRI in FY 2025–26?
Your visa status or country of employment alone does not determine your tax residency in India. Instead, your residential status is based on the number of days you were physically present in India during the relevant financial year and, in some cases, preceding years.
Keeping an accurate record of your travel dates is essential, as your residential status determines the scope of your tax liability and the ITR form you should file.
Residency rules: Why your travel record matters
Determining your residential status under Indian tax law involves more than simply checking your visa or place of work. The rules include multiple conditions and special thresholds for Indian citizens and persons of Indian origin (PIOs) visiting India, and the amount of Indian-sourced income you earn can also affect which residency test applies.
To establish your status, keep copies of your passport and maintain a travel record covering April 1, 2025, to March 31, 2026. Tax experts also recommend retaining travel records for earlier years, as some residency tests consider your presence in India over a longer period.
If you spent extended periods in India, worked remotely from the country, or made frequent visits that bring you close to a residency threshold, it’s worth confirming your status before filing. A change from non-resident to resident can significantly affect how your overseas income and foreign assets are taxed.
4. Which ITR form should an NRI use?
NRIs are not eligible to file ITR-1, as the form is reserved for qualifying resident individuals.
Most UAE-based NRIs will need to file ITR-2 if they have income from sources such as salary, house property, capital gains or other income but do not have business or professional income.
Those with business or professional income taxable in India are generally required to file ITR-3. Choosing the correct form is essential, as filing the wrong return can result in it being treated as defective or invalid.
Most UAE-based NRIs will need to choose between two income tax return forms, depending on the nature of their income:
- ITR-2: Suitable for individuals who do not have income from a business or profession. It covers income such as rent, capital gains, dividends, interest and other eligible sources.
- ITR-3: Meant for individuals who earn income from a business or profession in addition to any other taxable income.
Don’t choose a form simply because it appears shorter or easier to complete. Filing an ineligible return can result in it being treated as defective, delaying processing and potentially requiring you to submit a revised return.
The Income Tax Department’s guidance for Assessment Year 2026–27 confirms that ITR-2 and ITR-3 are the appropriate forms for most non-resident taxpayers.
5. What documents should I collect before filing?
Gather your key identification and financial documents before you begin filing. These include your PAN, passport, UAE residence visa, Emirates ID and Indian bank account details. You’ll also need supporting records for every source of income earned in India, as well as any deductions or exemptions you plan to claim.
The main documents to keep ready include:
- Annual Information Statement (AIS) and Taxpayer Information Summary (TIS)
- Form 26AS (now listed as Form 168 under the revised reporting framework)
- TDS certificates, including Form 16 or Form 16A, where applicable
- Statements for NRO, NRE, FCNR and other bank accounts
- Bank and fixed-deposit interest certificates
- Rental agreements, rent receipts and municipal tax records
- Home loan interest certificate
- Capital gains statements from brokers and mutual fund platforms
- Property purchase and sale documents
- Proof of eligible insurance premiums, medical expenses and other tax deductions
- Details of unlisted shares and directorships in Indian companies
- Records showing the number of days spent in India during the financial year
Before submitting your return, reconcile the information in your AIS, Form 26AS and personal records instead of relying solely on pre-filled data. The AIS may contain details of interest income, dividends, securities transactions and remittances reported by banks and other financial institutions, so verifying the information can help avoid notices or delays.
6. What should I do if my AIS or Form 26AS contains errors?
Don’t ignore discrepancies simply because your return has been pre-filled. Any mismatch between your records and the information reflected in the AIS or Form 26AS should be reviewed and resolved before you submit your ITR.
What if there’s an error in your AIS or Form 26AS?
If you notice a discrepancy, compare the entries with your bank statements, broker reports, property sale documents and TDS certificates to identify the source of the mismatch.
If an entry is duplicated, inaccurate or relates to a different financial year, you can submit feedback through the AIS section of the Income Tax Department’s e-filing portal to have it reviewed.
Where Tax Deducted at Source (TDS) is missing from Form 26AS, contact the deductor immediately. This could be your bank, tenant, property buyer or another entity that deducted the tax, and they may need to revise their TDS return before the credit appears in your account.
Ignoring unexplained differences can delay your tax refund or prompt the Income Tax Department to seek clarification after you file.
7. What happens if I miss the July 31 deadline?
Missing the July 31 deadline does not necessarily mean you lose the opportunity to file your return. In many cases, you can still submit a belated return, subject to the provisions of the Income Tax Act.
However, late filing can attract a penalty of up to Rs5,000. If your total income does not exceed Rs500,000, the maximum late fee is capped at Rs1,000. Filing after the deadline may also delay refunds and, in some cases, limit your ability to carry forward certain losses to future years.
What are the consequences of filing late?
Interest may also apply if any tax remains unpaid after the due date.
Missing the deadline can have additional consequences beyond late fees. Taxpayers may lose the ability to carry forward certain losses, including some capital losses, for adjustment against future gains. A delayed filing can also hold up any refund due.
“Many taxpayers only realise the importance of filing after missing refund claims or losing the ability to carry forward losses,” Jain said.
8. Is filing the return enough, or do I need to e-verify it?
Submitting your ITR form is not the final step. The return must be verified for it to be considered valid and complete.
After filing, taxpayers need to complete the e-verification process within the prescribed time limit. If the return is not verified, it may be treated as incomplete and not processed by the Income Tax Department.
How to complete verification after filing your ITR
Filing your return is only complete once it has been verified. The Income Tax Department requires taxpayers to complete verification within 30 days of filing the return.
Depending on your eligibility and account setup, available verification methods may include:
- Aadhaar OTP
- Electronic Verification Code (EVC)
- Net banking
- Digital signature certificate
NRIs who are unable to complete electronic verification can sign the ITR-V acknowledgement and send it to the Centralised Processing Centre (CPC) in Bengaluru within the prescribed timeframe.
Final checklist before submitting your ITR
Before you file, confirm the following:
- Have you selected Assessment Year 2026–27?
- Have you declared the correct residential status?
- Have you selected ITR-2 or ITR-3, as applicable?
- Do your AIS, Form 26AS and TDS certificates match your records?
- Have you reported all Indian bank interest income and capital gains?
- Is your Indian refund bank account active and pre-validated?
- Have you paid any remaining self-assessment tax, if applicable?
- Have you completed e-verification after filing?
The Income Tax Department has set July 31, 2026, as the due date for returns for Assessment Year 2026–27 that fall under this filing deadline. Taxpayer support services will operate 24 hours a day from July 25 until 11:59 pm Indian time on July 31 to assist with filing-related queries.
