Tax Filing For Expatriate in India: A Simple Guide for Foreign Nationals and NRIs (2026) 

• Taxation
• ||
• June 5, 2026

If you are a foreign national working in India, or an Indian who has returned from abroad, one question keeps coming up: “Do I have to pay tax in India, and how do I file my return?”

The honest answer is — it depends on how long you have stayed in India, not on which passport you hold. The good news is that the rules, once explained simply, are easy to follow.

This guide explains expat tax filing in India in plain English: who is treated as an expat, who actually has to pay tax, which form to use, and how to stay compliant before the July 31, 2026 deadline. By the end, you will know exactly what to do — and where to get help if you would rather hand it to an expert.

Deadline of Tax Filing for Expatriate Employees  in India

For income earned between April 1, 2025 and March 31, 2026 (Financial Year 2025‑26, Assessment Year 2026‑27), the standard last date to file your Income Tax Return (ITR) is July 31, 2026 for salaried individuals and most expatriates.

A few quick points:

• Salaried expats and individuals filing ITR‑1 or ITR‑2: file by July 31, 2026.
• Those with business or professional income filing ITR‑3 or ITR‑4: the due date is August 31, 2026.
• Cases that need a tax audit: October 31, 2026.
• Missed the deadline? You can still file a belated return by December 31, 2026, but a late fee under Section 234F (₹1,000 to ₹5,000) and interest will apply.

Who is an “expat” for Indian tax purposes?

Here is something most people don’t realise: the Income Tax Act, 1961 never uses the word “expat.”

The law does not care about your nationality. Instead, it decides your tax based on your residential status under Section 6 — which is mostly about how many days you spent in India. So a foreign citizen living in Bengaluru and an Indian citizen returning from Dubai are judged by the very same rulebook.

In everyday language, “expat” simply refers to people such as:

• Foreign nationals posted to India by their overseas employer.

• NRIs (Non‑Resident Indians) and OCIs/PIOs earning some income in India.

• Returning Indians who have come back after years of working abroad.

Whatever label you use, your tax outcome is set by Section 6.

Are expats taxed in India?

Yes — but how much of your income is taxed depends entirely on your residential status. Section 6 of Income Tax act 2025 is the backbone of the entire system. This section determines the residential status of a person in India and how that person will be taxed accordingly. It also explains what types of income are taxable in India, so it is important to understand this section clearly:

Step 1: Are you a Resident or a Non‑Resident?

You are treated as a Resident in a financial year if either of these is true:

1. You were in India for 182 days or more during the year; or

1. You were in India for 60 days or more during the year and 365 days or more across the previous four years.

If neither condition is met, you are a Non‑Resident (NRI) for that year.

Special case: For an Indian citizen or person of Indian origin only visiting India, the 60‑day limit becomes 182 days — or 120 days if their India income is above ₹15 lakh. 

Step 2: If Resident, are you “Ordinarily” or “Not Ordinarily” Resident?

Once you are a Resident, the law checks whether you are settled in India long‑term:

• You are a Resident and Ordinarily Resident (ROR) if you were a resident in at least 2 of the last 10 years and spent 730 days or more in India in the last 7 years.

• If you don’t meet both, you are a Resident but Not Ordinarily Resident (RNOR) — for example, if you were a non‑resident in 9 of the last 10 years, or stayed 729 days or fewer in the last 7 years.

The RNOR category is a big relief for people newly arriving in or returning to India, because your foreign income usually stays out of the Indian tax net for the first couple of years.

Section 6 at a glance

This table defines the residential status of a person in India, explains how the residential status tested, and shows what type of income is taxable in each case:

The takeaway: an NRI pays Indian tax only on income that arises in India (like Indian salary, rent or interest). An ROR pays Indian tax on income from everywhere in the world. RNOR sits comfortably in between.

How can expats file tax in India? A Simple Step‑by‑Step Process

Filing as an expat is very similar to filing as any resident, with a few extra disclosures. Here is the simple flow:

1. Get a PAN. A Permanent Account Number is mandatory to file a return.
2. Work out your residential status for FY 2025‑26 using the day‑count tests above — this decides how much income you must report.
3. Collect your documents: Form 16 (salary and TDS certificate from your employer), bank statements, investment proofs, and any foreign income and foreign tax documents.
4. Pick the correct tax regime. The new tax regime is the default; choose the old regime while filing on time if it works better for you.
5. Use the right ITR form (see below) and report all required income.
6. Claim DTAA relief. for any foreign tax by filing Form 67 before you submit your return.
7. File online on the income tax e‑filing portal — incometax.gov.in.
8. e‑Verify within 30 days. Your return is not complete until it is verified.

Which ITR form do expatriate employees need to file?

This is one of the most searched questions — and the answer is usually simpler than people fear:

• ITR‑1 (Sahaj): Generally NOT available to non‑residents or to anyone holding foreign assets or foreign income. Most expats cannot use it.

• ITR‑2: The most common form for salaried expats and NRIs who have no business income. This is the right form if you have salary, house property, capital gains, or foreign assets to report.

• ITR‑3: For expats who also have income from a business or profession in India.

If you are a salaried foreign national or NRI, ITR‑2 is most likely your form.

When you have foreign income or assets, three extra schedules in the form become important:

• Schedule FA – to report foreign assets (applies mainly to ROR taxpayers).
• Schedule FSI – foreign‑source income.
• Schedule TR – tax relief claimed for taxes already paid abroad.

How is an expat’s tax calculated in India? (a simple example)

Tax is charged on your taxable income after eligible deductions, using the slab rates of the regime you choose. The part that confuses most expats is double taxation — being taxed on the same income in two countries. India solves this through the DTAA (Double Taxation Avoidance Agreement) and the Foreign Tax Credit (FTC).

Here is the simple principle, with an illustration:

Suppose you are an ROR and earn foreign income on which ₹40,000 tax was already paid abroad, while the Indian tax on that same income is ₹60,000. Under the DTAA, you can claim a Foreign Tax Credit of the lower amount — ₹40,000 — and pay only the remaining ₹20,000 in India.

The credit is allowed under Section 90 / 90A (when India has a DTAA with that country) or Section 91 (when there is no treaty). 

In practice: convert foreign income and tax into rupees at the prescribed rate, claim credit only for foreign income tax (not social security or penalties), and file Form 67, obtain TRc on or before the return due date.

Because slab rates, regimes and treaty articles differ from country to country, this is exactly the area where professional help pays for itself.

Here are both regimes as clean tables for FY 2025‑26 (AY 2026‑27).

New Tax Regime (default)

Old Tax Regime (individuals below 60; allows deductions like 80C, 80D, HRA)

Points that apply to both:

• A 4% health and education cess is added on the tax, plus surcharge on higher incomes.
• Standard deduction: ₹75,000 (new regime) / ₹50,000 (old regime) for salaried individuals.
• Section 87A rebate (income up to ₹12 lakh effectively tax-free under the new regime; up to ₹5 lakh under the old) is for residents only — NRIs cannot claim it.
• In the old regime, the higher basic exemption for senior (₹3 lakh) and super-senior (₹5 lakh) citizens applies only to residents; NRIs always get the ₹2.5 lakh basic exemption regardless of age.

Expat Compliance Checklist (Your Simple To‑Do List)

Use this as a quick tick‑list for tax filers in India before the deadline:

• PAN obtained and active.
• Residential status for FY 2025‑26 correctly determined.
• Form 16 and all income proofs collected.
• Foreign income and foreign tax documents gathered (if applicable).
• Right ITR form identified (usually ITR‑2 for salaried expats).
• Tax regime chosen — old vs new.
• Schedule FA / FSI / TR completed where required.
• Form 67 filed for any Foreign Tax Credit claim.
• Obtain TRC Certificate if need to claim foreign tax.
• Return filed by July 31, 2026 (or the date that applies to you).
• Return e‑verified within 30 days.
• Records kept safely for at least six years.

Want to send your money back to your home country? Here’s the compliance

Earning in India is one thing — moving that money to your home country legally is another, and many expats get tripped up here. Sending funds out of India (repatriation) is governed by the Foreign Exchange Management Act (FEMA), 1999 and RBI rules, plus income‑tax compliance. The key principle is simple: only properly taxed money can leave India. Foreign nationals and NRIs can freely repatriate funds in NRE/FCNR accounts, while from an NRO account you may remit up to USD 1 million per financial year (per person) without prior RBI approval — anything above that needs RBI permission. Before your bank releases the transfer, you will normally need a short set of forms:

• Form 15CA – an online declaration filed on the income‑tax portal stating the remittance is tax‑compliant.

• Form 15CB – a certificate from a Chartered Accountant confirming the correct tax has been paid (usually required for larger remittances).

• Form A2 – a FEMA declaration to your bank stating the purpose of the transfer, along with proof of the source of funds.

A common and costly mistake is routing foreign salary into an NRO account instead of an NRE account, which creates avoidable tax and limits. Getting the account type and paperwork right from day one keeps taking your money home smooth and legal.

Common Mistakes Expats Make in India (and how to avoid them?)

Being a professional tax and accounting firm, we have seen many expat clients misunderstand the Income Tax Act and often end up filing their taxes incorrectly. The Income Tax Act, 1961 provides various tax benefits, including DTAA benefits, but many people are unaware of them and make mistakes while filing. Here are some of the major ones you should be aware of:

• Assuming nationality decides tax. It doesn’t — your day count does.

• Using ITR‑1 by mistake. Non‑residents and those with foreign assets usually can’t.

• Forgetting Form 67, which can get your foreign tax credit denied.

• Missing the RNOR window. Returning Indians often overpay by not using the relief on foreign income.
• Filing late. A belated return blocks the old regime and adds penalties.

Conclusion

Expat tax filing in India is far less scary once you focus on the one thing that drives everything — your residential status under Section 6. Count your days, pick the right ITR form, claim your DTAA relief through Form 67, and file before July 31, 2026. Do that, and you stay fully compliant while paying only the tax you actually owe.

That said, the details — RNOR planning, treaty relief, foreign asset reporting and repatriation — are where small errors become expensive. If you would rather get it right the first time, professional help is a smart investment.

How Mercurius helps expats file taxes in India 

At Mercurius, we specialize in expat tax services in India for foreign nationals, NRIs, OCIs and returning Indians. Our team takes the guesswork out of cross‑border tax so you can focus on your work and life in India.

We help you with:

• Residential status assessment and year‑on‑year tax planning (including the valuable RNOR window).

• End‑to‑end ITR preparation and filing in the correct form.

• DTAA and Foreign Tax Credit claims, including Form 67, to avoid double taxation.

• Foreign asset and income reporting (Schedule FA / FSI / TR) done accurately.

• Repatriation support — taking your money home through the right account, within FEMA limits, with Form 15CA/15CB handled for you.

• PAN assistance, advisory and full compliance support — well before the deadline.

📩 Beat the July 31, 2026 deadline. Talk to the Mercurius expat tax team today and file with complete confidence. To book a free consultation, click here- https://masllp.com/contact-us/

Frequently Asked Questions (FAQs)

1. Do foreign nationals have to file an income tax return in India?Yes. If you earn income that is taxable in India — most commonly Indian salary — youare required to file an ITR, regardless of your nationality. Your residential status decides how much income you must report.
2. What is the last date for expats to file ITR in India for FY 2025‑26?The standard due date isJuly 31, 2026 for salaried individuals and most expatriates (ITR‑1 / ITR‑2). A belated return can be filed up to December 31, 2026 with a late fee.
3. Which ITR form should an expatuse?Most salaried expats and NRIs use ITR‑2. Use ITR‑3 if you also have business or professional income. ITR‑1 is generally not allowed for non‑residents or those with foreign assets.
4. What does RNOR mean and why does it matter?RNOR stands forResident but Not Ordinarily Resident. RNOR taxpayers are taxed mainly on Indian income, with most foreign income kept outside the Indian tax net — a big relief for people newly arriving in or returning to India.
5. How do expats avoid being taxed twice on the same income?Through India’sDTAA with other countries. You claim a Foreign Tax Credit for tax already paid abroad by filing Form 67 before your return due date.
6. Is a PAN compulsory for expats filing tax in India?Yes, a PAN (Permanent Account Number) is mandatory to file a return and to claim any refund of TDS.
7. Can expats send their India earnings back to their home country?Yes. NRE/FCNR funds are fully repatriable, and you can remit up toUSD 1 million per financial year from an NRO account without RBI approval, after paying taxes and filing Form 15CA/15CB.

At Mercurius, we are a professional firm with more than 17 years of experience. We have a team of over 400 professionals, including tax accountants, Chartered Accountants, CPAs, Company Secretaries, and other experts working across various fields. We file more than 2,000+ Income Tax Returns (ITRs) in India every year.

If you are stuck somewhere in the tax filing process and need professional assistance, feel free to contact us.