“Synopsis”
The Union Budget 2025 has brought a wave of tax updates aimed at simplifying compliance and easing the burden for Non-Resident Indians (NRIs). From extended filing deadlines to relaxed disclosure norms and DTAA-friendly reporting, the government is making it easier for NRIs to stay compliant without the paperwork headache. This blog highlights the most relevant tax filing perks for NRIs in FY 2024–25 (AY 2025–26).
1. Extended ITR Filing Deadline for NRIs
One of the most welcome changes: the ITR filing deadline for NRIs (and other non-audited taxpayers) has been extended from July 31 to September 15, 2025.
Why it matters: NRIs often face delays in collecting documents from multiple countries. This extension gives more breathing room to gather Form 26AS, AIS, TRC, and Form 10F without rushing.
Legal Reference:
- CBDT Notification under Section 139(1) of the Income Tax Act, 1961
2. Higher Threshold for Reporting Assets & Liabilities
Previously, NRIs filing ITR-2 had to report Indian assets and liabilities regardless of income level. Now, this is only required if your gross taxable income exceeds ₹1 crore.
What this means: If your Indian income is below ₹1 crore, you no longer need to disclose every flat, FD, or mutual fund in the asset schedule—simplifying your ITR-2 filing.
Legal Reference:
- Income Tax Rule 12 (amended for AY 2025–26)
3. Capital Gains Segregation for Pre- and Post-July 2024 Sales
The new capital gains tax regime came into effect on July 23, 2024. The ITR-2 form now allows NRIs to report capital gains separately for:
- Transactions before July 23, 2024 (old tax regime)
- Transactions after July 23, 2024 (new 12.5% flat rate without indexation)
Why it matters: This segregation helps NRIs avoid confusion and ensures accurate tax computation—especially for property or equity sales straddling the transition date.
Legal Reference:
- Section 112(1)(c) and amended Schedule CG in ITR-2
4. Enhanced DTAA Reporting Made Simpler
NRIs claiming relief under a Double Taxation Avoidance Agreement (DTAA) must file:
- Form 10F (electronically)
- Tax Residency Certificate (TRC)
- Form 67 (for claiming foreign tax credit)
What’s new: The ITR utilities now allow easier integration of these forms, and Form 10F is valid for one year from the date of filing. This reduces the need to re-submit for every transaction.
Legal Reference:
- Section 90/91 of the Income Tax Act
- Rule 21AB and Rule 128
5. No TCS on Education Loans Under LRS
If you’re funding your child’s overseas education through a loan under the Liberalised Remittance Scheme (LRS), you’ll no longer face Tax Collected at Source (TCS) on those remittances.
Why it matters: This reduces the upfront cost of sending money abroad for education and simplifies tax reconciliation for NRIs supporting dependents.
Legal Reference:
- Budget 2025 amendment to Section 206C(1G)
6. Higher Limit for Tax-Free Family Transfers
The tax-free threshold for family remittances under LRS has been increased to ₹10 lakh per financial year. Transfers beyond this limit will attract 20% TCS on the excess.
Who benefits: NRIs supporting parents, children, or spouses in India can now remit more without triggering tax collection.
Conclusion
Budget 2025 has made it easier for NRIs to file taxes, claim DTAA relief, and manage cross-border finances without unnecessary friction. With extended deadlines, simplified disclosures, and smarter ITR utilities, the government is clearly moving toward a more NRI-friendly tax regime.
But remember: these perks only help if you use them. So file early, stay compliant, and structure your income smartly. Because in 2025, tax planning isn’t just about saving—it’s about simplifying
