What Is ITR 2 for NRIs
ITR 2 is the correct tax return form for NRIs with income earned or received in India. For 2026, filing rules follow the compliance framework for AY 2025 26.
ITR 2 is used when an NRI has any of the following income sources:
- Salary credited in India
- Rental income from property
- Long term or short term capital gains
- Interest from NRO deposits
- Foreign assets reporting
- Other income not linked to business or profession
NRIs must use ITR 2 for most income types including salary, capital gains, rental income, and other income earned or received in India.
ITR 2 is not used if the NRI has business or professional income. That requires ITR 3.
Who Must File ITR 2 in 2026
You must file ITR 2 if you are an NRI or RNOR and have:
- Salary Income
If your employer credits salary in an Indian bank account.
- Rental Income
Including jointly owned property.
- Capital Gains
From property sales, shares, mutual funds, or gold.
- Interest Income
From NRO accounts, NRO FDs, and taxable bonds.
- Foreign Asset Reporting
Schedule FA applies if you hold foreign assets and meet Indian tax residency rules.
NRIs returning to India must confirm RNOR status carefully. RNORs must disclose certain offshore assets under Schedule FA.
Documents Required for Filing ITR 2
Prepare these documents before starting the filing:
Passport travel history for residency calculation | PAN card | Aadhaar (only if applicable) | Form 26AS | AIS (Annual Information Statement) | TDS certificates | Rent receipts | Property details | Capital gains statements | Bank statements of NRO accounts | Form 16 (if applicable) | Form 15CA and 15CB receipts (if remitting funds)
Key Schedules NRIs Must Fill in ITR 2
ITR 2 contains several schedules. Not all apply to every NRI. Below are the most common schedules for NRI cases:
Schedule S
Salary income.
Schedule HP
House property income including rent.
Schedule CG
Short term and long term capital gains.
Schedule OS
Other income such as interest.
Schedule TR
Tax relief under DTAA.
Schedule FA
Disclosure of foreign assets (only for specific residency conditions).
Schedule TDS
Reporting TDS deducted on NRO deposits, rent, sale of property, or other income.
Step by Step Process to File ITR 2 as an NRI in 2026
Step 1: Calculate Residential Status
Follow Section 6 rules for AY 2025 26 to determine if you are NRI, RNOR, or Resident.
Step 2: Confirm Eligibility for ITR 2
Ensure you do not have business income. If you do, use ITR 3.
Step 3: Reconcile AIS and Form 26AS
AIS includes high value transactions and income details.
Form 26AS includes TDS and tax payments.
Step 4: Compute Income from All Sources
Include:
- Rent
- Capital gains
- NRO interest
- Taxable salary
Step 5: Apply DTAA Benefits
If relevant, claim foreign tax credit or reduced TDS.
Step 6: Fill Required Schedules
Enter accurate information in the schedules listed above.
Step 7: Validate and Compute Tax
The Income Tax portal computes tax automatically after validation.
Step 8: E Verify
- Aadhaar OTP
- Net banking
- Bank demat
- EVC
ITR is not processed unless verified.
Common Mistakes NRIs Make When Filing ITR 2
- Filing incorrect ITR forms
- Not reporting capital gains correctly
- Not applying DTAA benefits
- Failing to disclose relevant foreign assets
- Misreporting rental income
- Filing with unmatched AIS entries
- Incorrect indexation calculations for property gains
Benefits of Using ITR 2 Correctly
- Lower tax liability through DTAA
- Higher chances of timely refunds
- No defective return notice
- Full compliance with CBDT requirements
- Protection from penalties
- Better documentation for future remittances
How NRIHelpLine Helps You File ITR 2 Easily
NRIHelpLine provides:
- Correct residential status calculation
- Choice of correct ITR form
- AIS reconciliation
- TDS refund assistance
- Capital gains computation
- DTAA benefit analysis
- End to end filing of ITR 2
Your counseling session fee is fully adjustable in your final service fee.
FAQs
Q. Can NRIs use ITR 1 or ITR 4
Q. What if I file the wrong ITR form
Q. Do NRIs need to disclose foreign assets
Q. Can NRIs claim DTAA benefits in ITR 2
Q. Can NRIs claim TDS refunds
Q. Is AIS important for NRIs
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Expert’s Note
Many NRIs file ITR using incorrect forms. Filing ITR 1 or ITR 4 as an NRI results in a defective return notice under section 139(9), which delays refunds.
Sanjeev Sharma (Advocate – NRI HelpLine Tax & Property Law Specialist)
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