Do I need to file taxes in India if I returned in March (last month of financial year)?

Yes. Even if you spent just one month in India, if your Indian income exceeds ₹2.5 lakh (₹4 lakh in new regime), you must file. Check your exact residential status first using our calculator.

Can I claim refunds for TDS deducted when I was an NRI?

Absolutely. Many NRIs have excess TDS deducted at 30% on NRO interest. If your total India income is less than ₹2.5 lakh, you don't have to pay tax but must file an ITR to claim the refund.

Should I declare foreign bank accounts in my tax return?

If you're RNOR, there's no mandatory requirement in most cases. RNORs typically don't need to report foreign assets or bank accounts. But once you become ROR, you must declare all foreign assets in the ITR schedule.

Can I keep contributing to my foreign retirement accounts (401k, IRA, pension)?

Yes, you're permitted to continue holding your overseas assets that you invested in when you were an NRI. Just check if your employer allows contributions from India and understand the tax implications in both countries.

What happens to my foreign salary if it's paid after I returned?

The taxability depends on when you earned it, not when you received it. If you earned it while abroad and you're RNOR, it's not taxable in India even if paid after your return. But document this carefully with employment letters and salary breakdowns.

Is interest on GIFT City FDs really tax-free for residents?

Yes. GIFT City is a Special Economic Zone with special tax rules that allow tax-free interest for all Indian residents, not just NRIs or RNORs. Compare rates on our FD tool .

How long do I have to convert my NRI accounts?

As per FEMA, you must convert immediately once your residential status changes to resident. Practically, do it within a few weeks of return. Read our detailed guide on account conversion .

What if I don't have PAN card?

You must have a PAN to file taxes in India. Ensure a valid PAN is linked to your claim for DTAA benefits. Apply immediately if you don't have one. See our guide: PAN Card for NRIs .

Tax Filing Process for NRIs After Returning to India

Tax Filing First Year After Returning Back to India

Rajesh lived in Dubai for 12 years.

Built a good career. Saved well. Invested smartly.

Then in August 2024, he moved back to India. New job. Kids in Indian school. Mom finally stopped asking when he'd return.

By December, he got worried. "Do I file taxes as an NRI? Or as a resident? What about my Dubai salary from January to July?"

Tax filing in your first year back can feel like solving a puzzle with missing pieces.

We have advised hundreds of returning NRIs through this exact transition. The rules are complex, but the process doesn't have to be.

This guide walks you through everything you need to know about filing taxes in your first year after returning to India.

Your Tax Status Changes the Moment You Return (But Not the Way You Think)

Here's what most people get wrong.

They assume there's a grace period or a transition window where old rules still apply. There isn't.

Your residential status for tax purposes is determined by the number of days you spend in India during the financial year (April 1 to March 31).

If you return in August 2024, you're evaluating your status for FY 2024-25 (April 1, 2024, to March 31, 2025).

👉 Tip: The month you return matters. Return in April, and you're likely a Resident. Return in January, and you might still qualify as an NRI for that year.

Three Possible Status Categories

You become a Resident if you spend 182 days or more in India during the financial year, or 60 days in the current year and 365 days over the previous four years.

But here's where it gets interesting.

Once you're a Resident, you fall into one of two sub-categories:

Resident but Not Ordinarily Resident (RNOR) - Your safety net
Resident and Ordinarily Resident (ROR) - Full taxation begins

Most returning NRIs qualify as RNOR in their first year back. This status is powerful.

As an RNOR, you only pay taxes on income earned or received in India, similar to NRI status. Your overseas salary, dividends, rental income, or capital gains remain untaxed during the RNOR phase.

Use our Residential Status Calculator to determine your exact status. It takes 2 minutes and saves hours of confusion.

Who Qualifies as RNOR (And Why You Should Care)

You become RNOR if you were a Non-Resident for at least 9 out of the 10 previous financial years, or you stayed in India for 729 days or less during the 7 years preceding the current year.

If you've been an NRI for most of the past decade, you likely qualify.

RNOR Duration: Your Tax Holiday Window

RNOR status can last up to three financial years after returning to India. The longer you were an NRI, the longer your RNOR period typically lasts.

Example timeline:

Scenario 1: You were an NRI for 15 years, returned in FY 2024-25

FY 2024-25: RNOR (Year 1)
FY 2025-26: RNOR (Year 2)
FY 2026-27: RNOR (Year 3)
FY 2027-28: Become ROR

Scenario 2: You were an NRI for 5 years, returned in FY 2024-25

FY 2024-25: RNOR (Year 1)
FY 2025-26: Likely become ROR

👉 Tip: During your RNOR years, your NRE and FCNR accounts continue to earn tax-free interest. This is your window to restructure finances without immediate Indian tax impact.

Learn more about maximizing this status in our detailed RNOR guide.

What Income Gets Taxed in Your First Year Back

This is where it gets specific.

Your tax liability depends on both your status and income type.

If You're RNOR (Most Common First Year Status)

Taxable in India:

Salary earned in India after your return
Rental income from Indian property
Interest from NRO accounts (always taxable)
Capital gains from selling Indian assets
Any business/profession income from India

Not Taxable in India:

Salary earned abroad before returning (even if paid after return)
Foreign rental income, dividends, or interest
Capital gains from foreign assets
Income from overseas businesses (unless controlled from India)

👉 Tip: Keep foreign income in foreign bank accounts during RNOR years. Don't transfer it to India unnecessarily, as it may trigger tax questions.

If You're NRI for the Full Year

Only income earned or accrued in India is taxable. Your global income stays outside India's tax net.

If You're ROR (Rare in First Year)

Your worldwide income becomes taxable in India. You'll need to declare foreign income, but can claim benefits under Double Taxation Avoidance Agreements (DTAA).

The Account Conversion Maze (Handle This First)

Before you even think about filing taxes, sort out your bank accounts.

Once you return to India, you must re-designate your NRE and NRO accounts to resident accounts immediately as per FEMA regulations. There's no official grace period.

What Happens to Each Account Type

NRE Accounts: Must be converted to Resident Rupee accounts once you become a resident for tax purposes.

Interest earned before conversion: Tax-free
Interest earned after you become a Resident: Taxable
Can transfer funds to RFC account to maintain foreign currency holdings

NRO Accounts: Must be re-designated to resident savings accounts.

Always taxable, whether NRI or Resident
TDS deducted at 30% on interest as NRI; taxed at slab rates as Resident

FCNR Deposits: Existing FCNR accounts can continue until maturity.

Interest remains tax-free during RNOR period
On maturity, transfer to RFC account to continue tax benefits
If you're ROR at maturity, interest becomes taxable

RFC Accounts (Your New Best Friend): Returning NRIs can park funds in Resident Foreign Currency accounts as fixed deposits.

Interest on RFC accounts is tax-free only if you qualify as RNOR
Once you become ROR, interest is fully taxable
Helps protect against rupee depreciation

Check our guide on converting NRI accounts to resident accounts for step-by-step instructions.

👉 Tip: Don't rush to close FCNR deposits. Let them mature while you have RNOR status. The interest stays tax-free.

Documents You Need to File Your First Return

Start gathering these now.

Proof of Travel and Residency:

Passport (all pages with stamps)
Flight tickets for the year
Employment letter or offer letter in India
Utility bills at Indian address
Aadhaar, PAN card

Your residential status determination requires tracking days spent in India in the current and previous five years. Keep old passports handy.

Income Documents:

From India:

Form 16 (if employed in India after return)
Salary slips from Indian employer
Form 26AS (shows all TDS deducted on your behalf)
Bank statements from NRO/NRE accounts
Rental agreements and receipts
Form 16A for TDS on deposits

From Abroad:

Foreign salary slips (for the period you were abroad)
Foreign tax returns (if filed)
Tax Residency Certificate (TRC) from your previous country
Bank statements showing foreign income
Investment statements (dividends, interest)

Investment and Deduction Proofs:

LIC premium receipts
PPF statements (if any)
Home loan interest certificate
Section 80C investment proofs
Health insurance premiums (Section 80D)

👉 Tip: Maintain clearly labeled, scanned copies (preferably in PDF format) of all key documents. You'll need them for years to come.

Step-by-Step: Filing Your First Year Tax Return

Let's break this down.

Step 1: Determine Your Residential Status

Use the Residential Status Calculator first.

Count your exact days in India. A single miscalculation can change your status from RNOR to ROR, leading to global taxation.

Also Read - Residential Status Under Section 6 Of Income Tax Act

Step 2: Choose the Right ITR Form

ITR-2 is for income from salary, pension, or other sources except business. ITR-3 is for income from business or profession.

Most returning NRIs use ITR-2.

Step 3: Select Your Tax Regime

From AY 2024-25, the new tax regime is the default option, but you can select between old and new regimes each year.

Old Regime:

Lower tax slabs
Allows deductions under Section 80C, 80D, etc.
Better if you have significant deductible investments

New Regime:

Higher basic exemption limit (₹4 lakh vs ₹2.5 lakh)
Lower rates but no deductions
Simpler calculation

Opt in or out of regimes carefully based on your deductions. Run the math both ways.

Check our comparison: Old Tax Regime vs New Tax Regime.

Step 4: Register on the Income Tax Portal

Go to www.incometax.gov.in and register using your PAN.

Set up your account with:

Valid email ID
Mobile number
Password

Verify your email and mobile through OTP.

Step 5: Download Form 26AS

Form 26AS provides details of all TDS and related income. It's your simple source for claiming refunds.

Cross-check all TDS entries with your documents.

Step 6: Fill in Income Details

Be thorough. Declare:

All salary income (Indian and foreign for applicable periods)
Interest from all bank accounts
Rental income
Capital gains
Any other income

Under the "Income from Other Sources" section, separately note income earned abroad if you're RNOR (even though it's not taxable, declaration is good practice).

Step 7: Claim Deductions (If Using Old Regime)

Common deductions:

Section 80C (up to ₹1.5 lakh): LIC, ELSS, PPF
Section 80D (health insurance premiums)
Section 24 (home loan interest)
Section 80TTA (savings account interest up to ₹10,000)

Note: As an NRI, you are not eligible for the tax rebate under Section 87A or standard deduction of ₹50,000 under Section 16. But as a Resident, these become available.

Step 8: Calculate Tax and Check TDS

The portal auto-calculates your tax based on entries.

If your TDS exceeds liability, you'll get a refund.

If liability exceeds TDS, you'll need to pay the difference.

Step 9: Submit and E-Verify

Submit the ITR form and e-verify using Aadhaar OTP, net banking, or by sending a signed physical copy to CPC Bangalore.

Verify your submitted return within 30 days to authenticate your return.

👉 Tip: E-verify immediately after submission. Don't wait. The 30-day clock starts ticking.

Step 10: Save Acknowledgment

Download and save the ITR-V acknowledgment. You'll need this for loans, visas, and future references.

Claiming DTAA Benefits (If You Paid Tax Abroad)

India has Double Taxation Avoidance Agreements with over 90 countries to prevent double taxation.

If you paid tax on your foreign income in your previous country of residence, you can claim relief in India (if that income becomes taxable here).

Steps to claim DTAA benefits:

Obtain Tax Residency Certificate (TRC) from your previous country
Fill Form 10F with accurate personal and residency details
Submit declaration of residential status to the Indian payer
Ensure PAN is linked to your claim

The credit typically covers the lower of:

Tax paid abroad
Tax payable in India on that income

Learn more about specific treaties:

Tax Planning Moves to Make in Your First Year

Don't just file taxes. Plan them.

1. Time Your Asset Sales Strategically

Liquidate foreign assets during your RNOR period to benefit from tax exemptions on capital gains.

Planning to sell your US stocks or Dubai property? Do it while you're RNOR. The gains won't be taxed in India.

Once you become ROR, those same gains become taxable.

2. Consider GIFT City Investments

Here's a smart move most returning NRIs miss.

GIFT City investments are unique. It's a Special Economic Zone with special tax rules. Interest on GIFT City fixed deposits is tax-free for all Indian residents, not just RNORs.

Unlike NRE and FCNR deposits that lose tax benefits when you become ROR, GIFT City FDs remain tax-free even after your RNOR status ends.

You can invest in USD, protecting against rupee depreciation while earning tax-free returns.

Belong offers USD fixed deposits in GIFT City with:

5.0% annual returns
Zero tax on interest
Full repatriation
Doorstep KYC

Compare rates using our NRI FD Comparison Tool.

👉 Tip: Don't wait for RNOR status to end. Start moving to tax-efficient investments now.

3. Optimize Your NRE/FCNR Withdrawals

Plan withdrawals from NRE accounts before your status changes to ROR to optimize tax liabilities.

While RNOR, interest on these accounts stays tax-free. Once you're ROR, new interest becomes taxable.

4. Use Section 80C Wisely

Invest in ELSS funds to claim deductions up to ₹1.5 lakh annually under the old tax regime.

The lock-in is just 3 years, and you get equity exposure with tax benefits.

Better than traditional FDs where interest becomes fully taxable.

5. Keep Foreign Assets If They're Performing

As per FEMA regulations, you're permitted to continue holding your overseas assets that you invested in when you were an NRI.

Your US 401(k), UK ISA, or Dubai property can stay. Just declare them in your tax return once you become ROR.

Common Mistakes Returning NRIs Make (Avoid These)

I see these errors every tax season.

Mistake 1: Assuming Two-Year Grace Period on Accounts

Many believe there's a two-year grace period to convert NRI accounts. There isn't. As per FEMA, you must convert immediately once your residential status changes.

Banks might not chase you, but if caught, you face penalties and compliance issues.

Mistake 2: Not Tracking Days Precisely

Travel logs and passport copies are crucial to determine days spent in India. An error of even 10 days can flip your status.

Mistake 3: Ignoring Form 26AS

This form shows all TDS deducted on your behalf. It's a simple and straight source for claiming refunds.

Many returningNRIs file without checking it and lose rightful refunds.

Mistake 4: Mixing Up FEMA and Income Tax Status

FEMA classifies based on intention to stay in India for more than 182 days. Income Tax classifies based on actual physical presence.

You can be a Resident under Income Tax but technically still an NRI under FEMA for a short window. Don't assume they're identical.

Mistake 5: Not Declaring Foreign Income as RNOR

Even though foreign income isn't taxable during RNOR, declaring it shows transparency. It prevents future questions if tax authorities cross-check.

Mistake 6: Delaying Account Conversions

Delaying conversion can result in interest becoming taxable, potential FEMA violations, and penalties.

Banks report to RBI. Don't risk it.

Mistake 7: Not Getting Professional Help

Your first-year return is complex. If preparing the ITR yourself, challenges can complicate the process.

Get a qualified CA if:

You have income from multiple countries
You're unsure about your residential status
You have complex investments
You want to optimize DTAA benefits

👉 Tip: Use Belong's Compliance Compass to check if you're meeting all requirements.

When to File and What Happens If You're Late

The ITR due date for FY 2024-25 (AY 2025-26) is July 31, 2025. Due date for audit ITR is October 31, 2025.

The Income Tax Department has extended the due date to 15th September 2025 for FY 2024-25 due to delays in releasing the tax return utility.

If You Miss the Deadline

If ITR is not filed by due date, it can be filed as a belated return. Belated or revised ITR can be filed by December 31 of the relevant assessment year.

Example: For FY 2024-25, belated return deadline is December 31, 2025.

Penalties for late filing:

Between ₹1,000 and ₹10,000, depending on income and how late you file, plus interest on any unpaid taxes

Updated Return Option

The Budget 2022 introduced an updated ITR that can be filed up to 2 years from the end of the relevant assessment year, with a penalty based on tax payable.

But don't rely on this. File on time.

Also Read - Difference Between NRI and Resident Tax Filing in India

Special Scenarios: What If You Returned Mid-Year?

Let's tackle specific situations.

Returned in January 2025

You spent about 90 days in India in FY 2024-25 (Jan-March).

You likely remain an NRI for that full financial year. You'd need 182 days or 60 days in current year plus 365 in previous four years to become a Resident.

File as NRI. Only Indian income taxable.

Returned in July 2024

You spent about 270 days in India in FY 2024-25.

You're a Resident. If you were an NRI for 9 of the last 10 years, you qualify as RNOR.

File as RNOR. Indian income taxable; foreign income exempt.

Returned but Planning Short Trip Abroad

Be careful. If you maintain strong ties abroad (job, house, family), banks may question your residential status.

If you declare you're temporarily in India and plan to return abroad, banks may continue your NRE/FCNR accounts with proper documentation.

But review tax residency separately. Your global income may still become taxable in India even if FEMA treats you as NRI.

Also Read - How to File Income Tax Return in India as an NRI

The Belong Advantage: We Make This Easier

We built Belong because we've lived this transition.

We know the confusion, the conflicting advice, the fear of making a costly mistake.

That's why we created tools specifically for returning NRIs:

Residential Status Calculator - Know your exact status in 2 minutes
Compliance Compass - Check all your compliance requirements
GIFT City USD FDs - Tax-free returns that continue even after RNOR ends
NRI FD Rate Comparison - Compare all options at a glance

But tools are just the start.

Join our WhatsApp Community where returning NRIs share real experiences, ask questions, and get answers from people who've been through this exact process.

You're not alone in this transition.

Also Read - NRI Account to Resident Account Conversion

Key Takeaways: Your First Year Tax Filing Checklist

Let's recap what you need to do:

Before You File:
☑ Calculate exact days spent in India
☑ Determine your residential status (NRI/RNOR/ROR) ☑ Convert NRE/NRO accounts to resident accounts
☑ Decide on FCNR deposits (continue till maturity or convert to RFC)
☑ Gather all income documents (Indian and foreign)
☑ Download Form 26AS
☑ Decide between old and new tax regimes

While Filing:
☑ Use correct ITR form (usually ITR-2)
☑ Declare all income accurately
☑ Claim applicable deductions (if using old regime)
☑ Apply for DTAA benefits if you paid foreign taxes
☑ Cross-check TDS entries
☑ E-verify within 30 days

After Filing:

☑ Save ITR-V acknowledgment
☑ Plan tax-efficient investments for next year
☑ Consider GIFT City FDs for long-term savings
☑ Keep records organized for future years
☑ Set reminders for next year's filing

👉 Tip: Create a dedicated folder (digital and physical) for all tax documents. Label by financial year. Future-you will thank current-you.