Is the notice a demand for more tax?

Not usually. It is a requirement to file the return that was due. For many NRIs the TDS on rent or a property sale was over-deducted, so filing actually produces a refund. The notice is often the prompt that gets your money back rather than a bill.

What if I just ignore it because I am abroad?

The officer can make a best-judgment assessment under Section 144, estimating your income without the deductions and exemptions you never claimed, plus interest and a penalty under Section 270A. That is almost always worse than filing correctly, which for most NRIs yields a refund.

Can I still file for years that are quite old?

It depends on the year and the route. Some years can be filed as updated returns; where the window to claim a refund has passed, a condonation application may reopen it. A practising CA works out the right mechanism for each year.

Notices & Litigation

You never filed, you have Indian income, and a notice has arrived

Q: TDS was already deducted on my Indian income. Did I still have to file?

Often yes. Under Section 115A(5) an NRI is excused from filing only where the income was solely dividend or interest (and certain royalty or fees) with tax deducted at the prescribed rate or higher. Rent, capital gains or any other income takes you outside that, and a return was due.

The department says a return was due for a year you did not file, pointing at TDS and income already showing against your PAN.

You have some Indian income, rent, interest, a capital gain, and TDS has been deducted on it, so it all shows against your PAN. You assumed that because tax was already deducted, there was nothing more to do, and you never filed a return. Now a notice, often through a non-filer e-campaign, says a return was required. The position for an NRI is specific: sometimes you genuinely did not have to file, but often you did, and if you were over-deducted, filing is the only way to get your money back.

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Last reviewed: 26 July 20268 min readReviewed by Preetesh Maloo, CA

The short answer

The department can require you to file under Section 142(1) where a return was due and not furnished, and it runs non-filer e-campaigns off the TDS and income showing against your PAN. Whether an NRI had to file turns on a narrow rule: under Section 115A(5), you need not file if your income was only dividend or interest (and certain royalty or fees) with tax deducted at the prescribed rate or higher. If you had rent, capital gains, or any other income, or if the TDS over-deducted and you want a refund, filing is required. Continued non-filing can lead to a best-judgment assessment under Section 144, interest and penalties, so the fix is to respond and file the pending returns.

References on this page

Section 142(1), Income-tax Act: notice requiring a return to be filed
Section 115A(5): the narrow no-filing carve-out for certain NRI income with adequate TDS
Section 144: best-judgment assessment where you continue not to file
Section 270A: penalty for under-reporting; interest under Sections 234A / 234B / 234C

Why TDS being deducted did not settle it

The common assumption is that once tax is deducted at source, the obligation is over. For an NRI that is only true in a narrow case. Under Section 115A(5), you are excused from filing a return only if your total income consisted solely of dividend or interest (and certain royalty or technical-fee income) on which tax was deducted at the rate the section prescribes or higher. That box is small.

The moment you also had rent, a capital gain from a property or mutual-fund sale, or any other head of income, you fall outside the carve-out and a return was due. And even within the carve-out, if the tax was over-deducted, the only way to recover the excess is to file. So TDS does not close the matter for most NRIs; it is the starting point, and the notice is the department pointing out the gap.

What the notice is, and why you answer it

The notice usually comes as a Section 142(1) requirement to furnish the return, backed by the non-filer e-campaign that the department runs off the income and TDS visible against your PAN (Section 142(1)). It is not yet an assessment; it is a direction to file, and responding is straightforward: file the pending return, report the income correctly, claim the TDS, and where it was over-deducted, claim the refund.

For many NRIs in this position, filing is actually to their advantage, because the TDS deducted on rent or a property sale is usually far more than the real tax, so the return produces a refund rather than a demand. The notice, in other words, is often the prompt that gets you money back, not a bill.

What happens if you keep not filing

Ignoring the notice is where it turns costly. If you continue not to file, the officer can make a best-judgment assessment under Section 144, estimating your income from the material available, which will not credit the deductions and exemptions you never claimed, so the figure is usually worse than your real position. On top of that come interest under Sections 234A, 234B and 234C, and a penalty for under-reporting under Section 270A, with prosecution possible in serious cases.

So the choice is between filing correctly, which for most NRIs in this spot yields a refund, and leaving it to a best-judgment assessment that assumes the worst. A practising CA works out whether a return was actually due, files the pending years, claims the TDS and any refund, and responds to the notice, all remotely under your authorisation.

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What's involved

What the CA actually does

1
We check whether you had to file
We test your income against the Section 115A(5) carve-out to see whether a return was genuinely due, or whether the notice can be answered with an explanation.
2
We file the pending returns
Where filing is due, we prepare and file the returns for the relevant years, report the income correctly and claim the TDS shown against your PAN.
3
We claim your refund
Where the TDS on rent or a sale was over-deducted, we compute the real tax and claim the excess back with interest, which for many NRIs turns the notice into a refund.
4
We respond to the notice and close it
We file the response to the Section 142(1) notice so the matter does not proceed to a best-judgment assessment.

What to have ready

Documents you'll typically need

The notice and the year or years it covers
Your Form 26AS and AIS showing the income and TDS
Records of the income (rent, sale, interest) for those years
Your PAN and residency details

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next — how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 31 countries.

Frequently asked questions

Common questions

If this matched your situation, these go further

Your AIS shows a high-value transaction and the portal wants an answer Your refund window has closed, but the money may still be recoverable (Section 119(2)(b))Reopening an old year: responding to a Section 148 reassessment notice NRI ITR filing (we file for you)Past-year DTAA refund recovery DTAA TDS recovery Compliance Radar

A notice says you should have filed?

Send us the notice and the years. A practising CA will check if it was even due and file for the refund on a free call, no obligation.

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