How do I file an Indian income tax return as an NRI and claim back extra TDS?

This guide is for you if you live abroad, tax was taken from your Indian income before it reached you, and that tax looks bigger than anything you owe. It follows one case all the way through: interest on an NRO fixed deposit. Treaty rates country by country are in our tax treaty guide, and tax on gains when you sell Indian investments is in how India taxes an NRI’s gains.

Why the bank took more than you owe

You open your NRO statement and a big slice of the interest has gone as tax. An NRO account is the rupee account for income that arises in India. NRI, short for non-resident Indian, is the everyday word for an Indian who lives abroad. Two different sums were done on the same rupees, and that is where the extra comes from.

One note on years first: two different years both carry the label 2026-27. Tax Year 2026-27 is income from April 2026 to March 2027, under the new Act. The return you file now is for the earlier year, income from April 2025 to March 2026. Which year, which law, which form sets the two side by side.

The bank’s sum is flat. Tax deducted at source, or TDS, is tax the payer takes out before the money reaches you. Here the payer is your bank. From Tax Year 2026-27, the law tells anyone paying interest to a non-resident to deduct tax from it. For a non-resident Indian, the rate on “the whole of the other income” (income not listed separately) is 30%. We read interest on an NRO deposit funded from Indian income as that “other income”, so the bank deducts at 30%.Our reading A cess is an extra levy worked out as a percentage of the tax itself, not of your income. A Health and Education Cess of 4% is then added to the tax deducted from a non-resident. The bank does this on the interest alone. It does not know the rest of your income, and it does not wait for your return.

Your real tax is worked out in slabs. An individual’s tax is worked out under the “new regime”, the default method, unless they choose to leave it. It charges tax band by band, and each band is called a slab. From Tax Year 2026-27, the first ₹4,00,000 of an individual’s total income, resident or non-resident, is taxed at nil. Income from ₹4,00,001 to ₹8,00,000 is taxed at 5%. The 4% cess is added to this tax as well.

The rebate is for residents only. A rebate is a reduction in the tax itself. The rebate in the Act is available only to an individual resident in India, so as a non-resident you do not get it.

A surcharge, a further charge on the tax, starts only above ₹50,00,000, both on the tax deducted and on the tax you owe, so it plays no part here.

One year of Priya’s interest

Priya is made up for this guide, and her amounts are illustrative. She works in Dubai. Her only Indian income in Tax Year 2026-27, the year from April 2026 to March 2027, is interest on an NRO fixed deposit. That is the year of the next return, not the one you file now. The bank’s side follows our reading of the rate above.

Her interest is ₹6,00,000, and the bank took ₹1,87,200: 30% of the whole amount, plus cess. The tax she owes is ₹10,400: nothing on the first ₹4,00,000, 5% on the other ₹2,00,000, plus cess. The difference, ₹1,76,800, is hers to claim back through an Indian return.

The return you file now, for the earlier year. For income from April 2025 to March 2026, the tax department’s page for non-resident individuals also shows the first ₹4,00,000 taxed at nil under the new regime. Under the 1961 Act, which covers that year, the rebate is also only for an individual resident in India. What the bank took that year is on your annual tax statement; set it against the tax you owe for that year. The steps below show you how to check the statement.

The deduction is a down payment; the return settles it

Think of the deduction as a down payment on your tax, made for you by the bank. The return is where the year’s final tax is worked out and set against it.

Under the 2025 Act, if the tax paid for you in a tax year, including tax deducted at source, is more than the tax you are properly charged, you are entitled to the excess back. You claim it by filing an Indian return: every claim for a refund is made through a return. The 1961 Act, which covers the return you file now, also refunds tax paid above the tax properly charged for the year, and also only through a return.

Do you have to file at all? From Tax Year 2026-27, an individual must file a return if their total income, counted before certain deductions, is above the amount that is not charged to tax. The law also lets some non-resident Indians skip the return when their only Indian income was “investment income” with the tax already deducted, and we read that exception as not reaching interest on an NRO deposit funded from Indian income.Our reading That is because “investment income” there means income from a foreign exchange asset: one of the assets the Act lists, such as shares in an Indian company or certain deposits, acquired with convertible foreign exchange. Either way, a refund is claimed only through a return, so if more was taken than you owe, you file.

Which year, which law, which form

Two laws are in play this year, and each names the year in its own way. The new Income-tax Act, 2025 came into force on 1 April 2026, and income from that date falls under it. Income from years that began before then stays under the Income-tax Act, 1961.

Assessment year (the old Act’s name). The 1961 Act names a return by its assessment year: the return for income earned from April 2025 to March 2026 is the return for assessment year 2026-27.

Tax year (the new Act’s name). The 2025 Act names the income year itself: a tax year is the twelve-month financial year starting on 1 April, so income from April 2026 to March 2027 is Tax Year 2026-27.

So two different years carry the label 2026-27, and the return you file now is the one for assessment year 2026-27. ITR-2 is the return form for an individual, resident or non-resident, with no income from a business or profession. ITR-3 is the form for an individual who has that kind of income. The annual tax statement is the tax department’s record of the tax deducted for you, and it has a different name under each Act.

Deadlines, and why the late window matters

The return you file now. For someone with no business income and no audit, the due date was 31 July 2026. A return filed after the due date is called a belated return, and this one can be filed until 31 December 2026, or until the assessment is completed if that comes first.

The next return. Under the 2025 Act, the due date for an individual with no business income and no audit is 31 July after the tax year ends. A belated return then has nine months from the end of the tax year, or until the assessment is completed if that is earlier.

Filing late costs a fee under both Acts: ₹1,000 if your total income is not above ₹5,00,000, and ₹5,000 otherwise.

An updated return is a later return that corrects a year you have already filed, or missed. Under the 1961 Act, which covers the return you file now, an updated return cannot be filed if it would create a refund or make one bigger. The 2025 Act has the same limit for later years. So for income from April 2025 to March 2026, the late window above is the last ordinary chance to claim that year’s refund.

From statement to refund: what to do

1. Have a PAN. A PAN is India’s Permanent Account Number for tax. Under the 1961 Act, which covers the return you file now, every person must quote their PAN in their returns. The 2025 Act says the same from Tax Year 2026-27.
2. Check what was deducted. For the return you file now, the tax department gives you Form 26AS and the Annual Information Statement (AIS) on its e-filing portal, and both show the tax deducted at source. Look for the tax your bank took. From Tax Year 2026-27, the AIS is in Form No. 168.
3. File electronically, then verify. For the return you file now, you file electronically and verify the return in one of three ways: with a digital signature, with an electronic verification code, or by sending the return and then verifying it with a signed ITR-V. The ITR-V is the verification form you sign. If you use neither a digital signature nor a code, send the signed ITR-V to the Centralised Processing Centre (CPC) in Bengaluru within 30 days.
4. Give a bank account for the refund. A validated account is one the e-filing portal has checked. If you select more than one account for the refund, it is paid into one of your validated accounts after the return is processed. If you have no bank account in India, you can give the details of one foreign bank account instead.

Where people trip.

• Using the new names or forms for the return you file now: that return is for assessment year 2026-27, under the 1961 Act.
• Waiting past the late window: an updated return cannot be used to create or increase a refund.
• Filing without verifying: if you used neither a digital signature nor a code, the return is verified by sending a signed ITR-V to the CPC in Bengaluru within 30 days.
• Counting on the tax residency certificate alone for a treaty rate: the next section explains why.

A treaty lowers the rate itself, and it needs paperwork

The refund gives back tax above what you owe. A tax treaty is a different lever. A tax treaty, or DTAA (Double Taxation Avoidance Agreement), is an agreement between India and another country to avoid your income being taxed twice, once in India and once where you live; our tax treaty guide has the rates. Where India has a treaty with your country, the Act applies only where it is more beneficial to you than the treaty.

To claim treaty relief, you need a tax residency certificate (TRC) from your country’s government, plus the other documents and information the law asks for. A TRC is your home country’s proof of where you are tax-resident. Which form goes with the certificate depends on the year the income belongs to.

For the return you file now, the 1961 Act also asks for a certificate of residence from your country’s government, plus the prescribed documents and information. For that income, which arose before 1 April 2026, the declaration that goes with the certificate is Form No. 10F.

For income from Tax Year 2026-27, the next return’s year, those other details go in Form No. 41. Form No. 41 is a self-declaration that you file yourself, once in each tax year you claim, even if you have no PAN. It can be filed only online, on the Income Tax e-filing portal. Without a valid Form No. 41, the treaty benefit is not available, and the payer deducts tax at the rate applicable.

The certificate on its own is not the whole claim: we read treaty relief as also needing Form No. 41 and meeting the other conditions in the law.Our reading We read the paperwork as working best when it is in place before the interest is paid, with the return as the fallback for any excess.Our reading

One more route acts in advance: you may apply to the Assessing Officer, the tax officer in charge of your case, for a certificate for a lower deduction or none, which the payer then follows while it is valid.

Where you live changes the paperwork, not the route

The return, the dates and the steps are the same wherever you live; what changes is the treaty and who issues your certificate. A dash in the table means this guide does not cover that point for your country.

In short

The bank took a flat slice of your interest because it never sees your whole year. Your real tax is worked out in slabs, and the gap between the two is yours to claim back. For income from April 2025 to March 2026, you claim it by filing an Indian return, which you can still file late, with a fee, until 31 December 2026 at the latest. Check your statement, file, verify, and give a bank account for the refund. A treaty is a separate lever that lowers the rate itself.

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