Introduction
ITR-2 filing for NRIs for Assessment Year 2026-27 is important for taxpayers who have Indian income but do not qualify as resident taxpayers. NRIs cannot file ITR-1 or ITR-4 in the normal way. For many NRI taxpayers, ITR-2 or ITR-3 becomes relevant depending on the type of income.
If the NRI has salary from abroad, Indian capital gains, NRO account income, dividend, savings interest or crypto transactions, the return should be prepared carefully. The first step is not data entry. The first step is checking AIS, Form 26AS, broker statements and residential status.
For professional help with NRI return filing, you may use TaxClear’s NRI taxation support.
Main Discussion
For AY 2026-27, ITR-2 is relevant for many NRIs who have Indian income but do not have business or professional income. If the NRI has F&O or business income, ITR-3 may be required instead of ITR-2.
The expert discussion clearly explains that NRIs were waiting for ITR-2 and ITR-3 forms because they cannot normally use ITR-1 or ITR-4. Once ITR-2 becomes available, the NRI can start filing where the return fits the income profile.
A typical NRI ITR-2 case may include:
- Indian capital gains
- Sale of shares or mutual funds
- NRO account interest
- Dividend income
- Savings account interest
- Rental income from Indian property
- Crypto or VDA transactions
- TDS credit
- Carry forward of capital loss
The return should be filed only after proper working is prepared.
First Step: Check AIS and Form 26AS
Before starting ITR-2, the NRI should check Form 26AS and AIS.
Form 26AS helps verify TDS credit and tax-related information. AIS gives a wider picture of transactions reported against the PAN. In the discussion, securities and mutual fund sale transactions were visible in AIS. The expert specifically mentioned that the ITR reporting should match these details.
If AIS shows selling of securities or mutual funds, the broker capital gains statement should be matched with AIS. If there is mismatch, the return may later face questions.
The taxpayer should check:
- TDS deducted
- Securities sale value
- Mutual fund transactions
- Dividend income
- Savings interest
- NRO account interest
- Any other reported Indian income
For mismatch or notice-related cases, TaxClear’s income tax notice service can help in preparing a proper response.
Residential Status in ITR-2
The NRI must correctly select residential status in the return.
In the ITR-2 form, the taxpayer has to select that he or she was a non-resident during the previous year. The jurisdiction of residence should also be entered. If the NRI lived in Oman, for example, Oman has to be selected as the jurisdiction of residence.
The passport number should also be entered as identification details.
If the person stayed outside India for 182 days or more during the previous financial year, the NRI position has to be checked and reported accordingly. The form may also ask for stay details in specific cases, so the taxpayer should keep travel details ready.
Do not fill residential status casually. A wrong residential status can affect reporting of income, schedules and taxability.
NRO Account vs NRE Account
A very practical point discussed is the difference between NRO and NRE account transactions.
The expert explained that NRO account transactions need to be considered in ITR where Indian income is involved. However, NRE account transactions are not required to be reported in the same way where the taxpayer is NRI and the facts support that treatment.
This point is important because many NRIs get confused and start reporting everything. The return should include Indian taxable income and relevant reportable items. Foreign salary income is not required to be reported in India merely because the person is filing as NRI, as per the discussion.
If the NRI has Indian income through NRO account, such income should be checked and reported.
Tax Regime Selection for NRIs
The return also asks about regime selection.
The expert discussed Section 115BAC option in the form. In simple terms, this is linked with old tax regime and new tax regime selection.
For NRIs, the discussion mentioned that the rebate benefit is not available in the same manner. Therefore, the taxpayer should compare old regime and new regime before selecting. If there are no deductions, the new regime may be more beneficial in many cases, but the final answer depends on facts.
The taxpayer should not select old or new regime without checking computation.
For proper comparison, TaxClear’s tax planning service can help before final filing.
When ITR-3 May Be Required
ITR-2 is not for every NRI.
If the NRI has F&O trading or business income, the taxpayer may have to wait for ITR-3 and file under ITR-3 instead. The expert clearly mentioned that NRIs having F&O trading should wait for ITR-3.
Therefore, before filing ITR-2, check whether the income is only capital gains or whether it includes business income.
If the taxpayer wrongly files ITR-2 despite having F&O business income, the return may be incorrect.
Practical Impact
NRI return filing should be done in a step-by-step manner.
A practical checklist is:
- Check residential status.
- Download Form 26AS.
- Download AIS.
- Match TDS.
- Match securities and mutual fund transactions.
- Prepare broker-wise capital gains summary.
- Check NRO account interest.
- Check dividend and savings interest.
- Check crypto/VDA transactions.
- Decide whether ITR-2 or ITR-3 applies.
- Select tax regime carefully.
- Validate loss carry forward.
This approach reduces the chance of mismatch, wrong form selection and refund delay.
Conclusion
NRI ITR-2 filing for AY 2026-27 should be done carefully. The taxpayer should not start filing directly without checking AIS, 26AS, residential status, NRO income and capital gains.
ITR-2 is suitable where the NRI has Indian income such as capital gains, interest, dividend or rental income, but no business income. If F&O or business income exists, ITR-3 should be checked.
A proper return helps the NRI claim TDS, report Indian income correctly and carry forward eligible losses.
key takeaways
- NRIs generally cannot file ITR-1 or ITR-4.
- ITR-2 may apply where there is no business income.
- ITR-3 should be checked if F&O or business income exists.
- AIS and Form 26AS should be checked before filing.
- NRO income should be reviewed for reporting.
- NRE account transactions should not be mixed blindly with taxable income.
- Residential status must be selected correctly.
- Passport number and jurisdiction of residence should be entered.
- Tax regime should be selected after computation.
- Capital gains should be matched with broker reports and AIS.
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