NRIs Face Changes in Income Tax Return Filing for FY 2024-25
The changes in income tax return filing for NRIs are aimed at improving transparency and compliance, but the delay in refunds is a concern for honest taxpayers. The government must strike a balance between enforcing tax laws and ensuring that taxpayers receive their refunds in a timely manner. With the extended deadline and new regulations in place, NRIs must be vigilant and ensure that they comply with all the requirements to avoid any penalties or delays.
Non-Resident Indians (NRIs) filing their Income Tax Return (ITR) in India for the financial year 2024-25 must be aware of four key changes, including increased threshold for reporting assets and liabilities, segregation of capital gains by date of sale, enhanced disclosures in ITR forms, and an extended ITR filing deadline.
The increased threshold for reporting assets and liabilities is a significant change, as NRIs filing ITR-2 must report assets and liabilities only if their gross taxable income exceeds Rs 1 crore in FY 2024-25. Additionally, the new capital gains tax regime applies to transactions after July 23, 2024, and NRIs must report capital gains before and after this date separately. The ITR-1 and ITR-4 forms also require additional details, such as policy numbers for life insurance policies and PRAN account numbers for NPS investments.
The deadline for filing ITR has been extended from July 31, 2025, to September 15, 2025, for FY 2024-25 (AY 2025-26). However, taxpayers in India are facing delays in receiving their income tax refunds for the assessment year 2025-26 due to a new rule that requires the tax department to clear past assessments before issuing refunds. Experts warn that the widespread use of this provision could hurt honest taxpayers who rely on timely refunds for financial planning and liquidity.
NRIs filing income tax returns in India for FY 2024-25 (AY 2025-26) must use the ITR-2 form, as ITR-1 is not applicable to them. It's mandatory for NRIs to file ITR if their taxable income in India exceeds the basic exemption limit or if they want to claim a refund. Key changes for this year include asset and liability reporting, capital gains reporting, and additional details required for deductions.
In conclusion, NRIs must be aware of the changes in income tax return filing for FY 2024-25 and take necessary steps to ensure compliance with the new regulations. The extended deadline provides some relief, but taxpayers are still concerned about the delay in refunds. The government must ensure that the refund process is improved through AI-based automation and that low-risk taxpayers are identified and refunds issued quickly.