NRIs in UAE: 8 Common ITR Filing Mistakes That Could Delay Your Indian Tax Refund

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NRIs in UAE: 8 Common ITR Filing Mistakes That Could Delay Your Indian Tax Refund

Non-Resident Indians (NRIs) in the UAE expecting tax refunds from India this year should exercise caution when filing their Income Tax Returns (ITR). The Indian tax department has flagged eight common errors that often delay or jeopardize refunds.

According to experts, even minor discrepancies can trigger scrutiny, resulting in prolonged delays or notices from the Income Tax Department. Here's what NRIs must watch out for:

1. Invalid or Inactive Bank Account

Refunds are often rejected if routed to dormant, unmapped, or incorrectly linked NRE/NRO accounts. Ensure your account is active, PAN-linked, and updated on the Income Tax portal.

2. Wrong ITR Form

Different income sources—like salary, capital gains, or foreign assets—require specific ITR forms. Using the wrong form can lead to a defective return and delayed processing.

3. Data Mismatch

Ensure your reported income and tax deductions match Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS). Mismatches, often caused by errors in Form 16 or missed TDS entries, can halt refunds.

4. Failure to e-Verify

You must e-verify your ITR within 30 days of filing using Aadhaar OTP, net banking, or other valid methods. Unverified returns are deemed invalid.

5. Incorrect or Unsupported Deductions

Deductions under Sections 80C, 80D, and 80G must be legitimate and supported by proof. Over-claiming can result in refund delays or scrutiny.

Note: NRIs can claim:

Up to ₹1.5 lakh under 80C (e.g., ELSS, insurance, tuition fees)
Up to ₹75,000 under 80D for health premiums (self/family + senior parents)
Deductions under 80G for digital/cheque-based charitable donations in India. Cash donations over ₹2,000 do not qualify.

6. Undisclosed Income

Even seemingly minor income—such as FD interest, dividends, or rental income—must be declared. Omissions often trigger delays or inquiries.

7. Late Filing

Missing the July 31 deadline can result in penalties, interest, and a delayed refund. Timely filing is crucial for hassle-free processing.

8. Ignoring IT Notices

If your return is flagged, the department will send alerts via SMS, email, or through your online portal. Failing to respond can stall or cancel refunds.

Bottom Line

NRIs can avoid refund hassles by double-checking their ITR forms, bank details, income declarations, and e-verification status. Stay updated through the tax portal and respond promptly to any notices.

Pro tip: File early and accurately for a smoother refund experience.