Income Tax Notice to an NRI? Why It Comes and How to Reply From Abroad
An email from the Income Tax Department lands while you are in Dubai, London or New Jersey. It quotes a section number, an assessment year you barely remember, and a reply date that is closer than you would like.
Most notices to NRIs are not accusations. They are data questions: the department's records show a transaction or a TDS credit that your return does not explain, or no return at all. The reply has to close that gap, with documents.
Quick answer: Identify the section, compare the department's data (AIS, TIS, Form 26AS) with your return, and reply on the e-filing portal before the due date, yourself or through an authorised representative. Attach evidence: sale deeds, bank statements, TDS certificates, travel records, and a Tax Residency Certificate where you claim a treaty rate.
Contents
Which law applies? The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. Notices, assessments and appeals for AY 2026-27 and earlier years continue under the 1961 Act (section 536(2)(c) of the 2025 Act). This post gives the 1961 section first and the 2025 Act equivalent in brackets.
Why do NRIs get income tax notices?
Banks, registrars, buyers of property and fund houses report your transactions to the department. That data flows into your Annual Information Statement. When it does not match your return, a system-generated notice follows.
The usual triggers for non-residents:
Property sale, no return: the buyer deducted TDS under section 195 and filed a TDS return, so the sale shows in your AIS, but you assumed TDS was the end of it and did not file.
NRO interest not fully reported: interest from a second bank or a fixed deposit renewal appears in AIS but not in the ITR. See AIS/TIS mismatch in ITR.
Wrong residential status: the return says non-resident, but the day count or the deemed-resident rule says otherwise.
Treaty rate without paperwork: a lower DTAA rate claimed without a Tax Residency Certificate or Form 10F.
TDS credit mismatch: the buyer or bank quoted a wrong PAN or filed the TDS return late, so the credit you claimed is missing and a demand is raised.
High-value transactions with no return: property purchases, large mutual fund investments or share sales reported by third parties.
Note that the exemption from filing in section 115G is narrow. It covers only investment income and long-term gains on foreign exchange assets under Chapter XII-A where tax was deducted. Gains on a flat or a plot are outside it.
Worked example: a flat sold, no return filed, then a section 148A notice
Meera (illustrative) lives in Dubai and is a non-resident. In August 2024 she sold a flat in Pune for ₹90 lakh. She had bought it in 2015 for ₹55 lakh.
TDS: with no lower deduction certificate, the buyer deducted tax on the full ₹90 lakh: 12.5% plus 10% surcharge plus 4% cess, about ₹12.87 lakh.
Actual tax: the long-term gain is ₹35 lakh (before transfer costs). For a non-resident selling after 23 July 2024, the rate is 12.5% without indexation, so tax with cess is about ₹4.55 lakh.
What she did: nothing. She assumed the TDS settled it. The due date and the 31 December 2025 belated date for AY 2025-26 both passed.
What arrives: a notice under section 148A(1) (section 281 of the 2025 Act) citing "sale of immovable property ₹90 lakh, return not filed".
The reply. Meera replies within the time in the notice, with the sale deed, purchase deed, Form 16A from the buyer and a computation. The key point: the income that escaped assessment is the gain of ₹35 lakh, not the ₹90 lakh sale value.
That matters for time limits. For AY 2025-26, a 148A notice can be issued within three years from the end of the assessment year where escaped income is below ₹50 lakh; the five-year window applies only at ₹50 lakh or more.
If the case is reopened, she files a return in response to the section 148 notice (section 280) within the time it allows, not exceeding three months from the end of the month of the notice. The TDS is claimed in that return and the excess is dealt with in the reassessment.
Why not an updated return? An updated return under section 139(8A) cannot reduce tax or increase a refund. When TDS exceeds the tax, it does not help.
For the selling side done right, see NRI property sale in 2026: TDS, capital gains and lower deduction.
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Which notice is it? Section by section
Section 139(9): defective return [section 263(7)]
The return is incomplete or inconsistent, for example TDS claimed on income that is not reported. You get 15 days from the intimation, or more if allowed, to file a corrected return. If you do not, the return is treated as invalid, as if never filed.
Section 143(1)(a): proposed adjustment [section 270(1) and (2)]
The Centralised Processing Centre proposes an adjustment, such as adding NRO interest seen in AIS. You have 30 days to agree or disagree online. Silence means the adjustment is made and a demand may follow.
For what to do after the intimation, see received an income tax intimation under section 143(1).
Section 133(6): call for information [section 252]
An information request, often before any proceeding starts. Reply by the date given, with documents and a short factual note. What you say here can be relied on later in a reopening, so be precise.
Section 143(2): scrutiny [section 270(8)]
Your return is selected for detailed assessment. The notice must be served within three months from the end of the financial year in which the return was filed. Questionnaires under section 142(1) follow; answer each one separately.
Sections 148A and 148: reopening [sections 281 and 280]
The 148A notice is a show-cause step with the information relied on. Your reply can stop the reopening. If the case is reopened, a 148 notice follows with the order under section 148A(3). Our guide to 148A vs 148 notices for AY 2026-27 covers the time limits.
Demand after a TDS credit mismatch
Often the fault is the deductor's: a wrong PAN, a wrong amount, or a late TDS return. Ask the buyer or bank to file a correction statement. Once the credit appears in Form 26AS, seek rectification under section 154.
How to reply when you live outside India
Check the notice is genuine. Use the "Authenticate notice/order issued by ITD" service on the e-filing portal and note the DIN, section, assessment year and due date.
Log in to the portal and open Pending Actions, then e-Proceedings. Most notices to NRIs are answered here, not by post.
Download AIS, TIS and Form 26AS for the year and compare them line by line with the return.
Collect evidence while it is still easy: sale and purchase deeds, NRO/NRE statements, TDS certificates, Form 15CA/15CB copies, and passport pages for travel days.
If you cannot meet the date, request an adjournment on the portal before it expires, with a reason.
Submit a short, numbered reply. Each point should answer one item in the notice and refer to an annexure.
Save the acknowledgement and watch the portal and registered email for the next notice.
Acting through someone in India. Under section 288 (section 515 of the 2025 Act), you can attend proceedings through an authorised representative, such as a relative, an advocate or a chartered accountant, appointed in writing. Separately, where an individual is absent from India, section 140 (section 265) allows the return to be verified by a person holding a valid power of attorney.
Keep your email and Indian mobile number on the portal current. Many NRI cases go ex parte simply because notices went to an old address.
If the notice questions your residential status
Status depends on days in India, and the rules changed in 2020. Under section 6(1) of the 1961 Act (section 6 of the 2025 Act), an individual is resident if in India for 182 days or more, or 60 days plus 365 days over the four preceding years.
For an Indian citizen or person of Indian origin who lives abroad and visits, the 60 days become 182. They become 120 days if total income other than from foreign sources exceeds ₹15 lakh. A person resident only through this 120-day rule is "not ordinarily resident" (section 6(6)(c)).
Worked example. Arjun (illustrative), an Indian citizen working in the US, spent 130 days in India in FY 2025-26 and 400 days over the four previous years. His Indian rent, interest and gains total ₹18 lakh.
Indian income exceeds ₹15 lakh, so the 120-day test applies.
130 days plus 400 days in the previous four years makes him resident, but not ordinarily resident.
As an RNOR, his US salary stays outside Indian tax, but the return must still show the correct status.
His evidence if questioned: a day-count table backed by passport stamps and travel records.
Also check section 6(1A): an Indian citizen with Indian income above ₹15 lakh who is not liable to tax in any other country because of domicile or residence is deemed resident (and RNOR). This is a frequent question for Gulf-based NRIs. See the NRI tax guide 2026 for the full tests.
If the notice questions a DTAA rate
Under section 195, NRO interest normally suffers TDS at 30% plus surcharge and cess. A lower treaty rate needs a Tax Residency Certificate (section 90(4)) and Form 10F where the TRC lacks prescribed details.
For tax years from 2026-27, Form 10F is replaced by Form 41 under the Income-tax Rules, 2026. See Form 41 replaces Form 10F. If the notice disputes a treaty claim, file the TRC for the relevant year, Form 10F or Form 41, and proof that the income falls under the treaty article you relied on.
If the order goes against you
Mistake on the record: rectification under section 154, within four years from the end of the financial year of the order.
Disputed addition: appeal to the CIT(A) within 30 days in Form 35 (Form 99 under the 2026 Rules), then to the ITAT within two months from the end of the month the order is communicated (section 253, now section 362).
Missed the deadline: see condonation of delay in income tax appeals.
Demand being recovered: apply for a stay while the appeal is pending. See stay of demand: the 20% rule.
Summary table
Notice | 1961 Act | 2025 Act | Reply window |
|---|---|---|---|
Defective return | s.139(9) | s.263(7) | 15 days or as extended |
CPC proposed adjustment | s.143(1)(a) | s.270(1), (2) | 30 days |
Call for information | s.133(6) | s.252 | Date in notice |
Scrutiny | s.143(2) | s.270(8), (9) | Served within 3 months of FY-end of filing |
Show cause before reopening | s.148A | s.281 | Date in notice |
Reassessment notice | s.148 | s.280 | Max. 3 months from end of month |
Authorised representative | s.288 | s.515 | Appointment in writing |
Residential status | s.6 | s.6 | Evidence of days in India |
First appeal | s.249, Form 35 | s.358, Form 99 | 30 days |
Common mistakes
Ignoring the notice because it came by email, or because the tax was "already deducted".
Answering with the sale value instead of the gain, and letting the larger figure stand.
Claiming NRI status without a day count you can prove.
Claiming a treaty rate with no TRC for that year.
Letting the reply date pass instead of asking for an adjournment in time.
Filing an updated return to claim a refund, which the law does not allow.
Related reading
Sources
Income-tax Act, 1961: sections 6, 90, 115G, 133, 139, 140, 142, 143, 148, 148A, 149, 154, 195, 249, 253 and 288; Income-tax Act, 2025: sections 6, 252, 263, 265, 270, 280, 281, 282, 358, 362, 515 and 536; Income-tax Rules, 2026, Rule 166 and Form 41; CBDT Directorate of O&MS, FAQs on Interplay and Transition from the Income-tax Act, 1961 to the Income-tax Act, 2025 (incometaxindia.gov.in). Names and figures in the examples are illustrative. Educational content only, reflecting the law as of 31 October 2026; check the current law for your facts.
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