New Income Tax Act for NRIs: 3 Key Tax Compliance Changes from April 2026

Effective from 01st April 2026, the Indian Income Tax Act, 1961 was replaced by the Income Tax Act, 2025. While the intent of the law is similar to the Income Tax Act, 1961, the Income Tax Act, 2025 simplifies the law through clearer language, fewer sections, and digital-focused compliance, while largely retaining the existing tax structure. However, there have been some adjustments in the compliance statutes relating to the NRI's interaction with the Indian Income tax.

1. Change in the form filing for claiming double taxation relief (DTAA):

Assessee who are residents of countries having a double taxation agreement with India and are earning income which is taxable in both countries (i.e Indian Income), can claim the benefit of the DTAA to avoid double taxation on such income. Until 31st March 2026, Form 10F was filed by the assessee in order to claim the DTAA relief. However, as per the Income Tax Act, 2025 Form 10F has been effectively replaced by Form 41. While the intent and content of the form remain similar, the assessee needs to file Form 41 only for claiming DTAA relief in tax year 2026-27, If Form 10F is filed instead of Form 41, the income tax authorities may reject or deny the DTAA benefit on the grounds of submission of an incorrect or invalid form.

2. PAN application for NRI's:

Until 31st March 2026, all NRIs filed Form 49AA to apply for a Permanent Account Number (PAN), the Tax Identification Number in India, which is essential for NRIs to obtain for multiple material purposes related to income tax. As per Income Tax Act, 2025- form 49AA has been replaced by multiple forms as per the citizenship applicability of the NRI's. Overseas citizens of India (OCI) need to apply for their PAN via Form 95, while other NRI's need to file their PAN application via Form 93. The assessee needs to file Form 93/95 (as applicable) only when applying for PAN from tax year 2026-27. If Form 49AA is filed instead of Form 93/95, the income tax authorities can reject the PAN application on the grounds of an invalid form submitted.

3. Change in form filing for repatriation of funds:

Until 31st March 2026, form 15CA-CB was used or repatriation of funds outside India.If threshold limit of INR 5 lakhs was exceeded in the financial year, along with form 15CA, form 15CB was also required which was certified by a chartered accountant after confirming that applicable taxes were correctly deducted and complied with before sending money abroad. In other cases only 15CA was sufficient. as per the Income Tax Act, 2025, Form 15CA has been replaced by form 145 and form 15CB has been replaced by form 146. Assessees must file Forms 145 and 146 (where applicable) while repatriating funds from India from Tax Year 2026–27 onwards. If Forms 15CA and 15CB are filed instead of Forms 145 and 146, the income-tax authorities or authorized dealer banks may reject or block the remittance on the grounds of incorrect form submission.

To summarize, while the intent behind the forms is consistent with the previous Income Tax Act, NRIs need to use the revised forms prescribed under the Income-tax Act, 2025 to ensure seamless completion and regulatory compliance. The underlying obligations haven’t changed, but the paperwork has and in tax administration, the paperwork is the process.

If you are unsure of which forms to applied for specific situations or a professional expert who ensure your filings are in proper order under the new act, the team at KDP Accountants has been advising NRIs on Indian tax & compliance over the long decades. Whether if it is DTAA relief, PAN applications, or cross-border remittances, connect with us at enquire@kdpaccountants.com, we are happy to help you navigate the change without the confusion.

Jaiv Desai
Author

CA final student, Article assistant,
Possesses a sound understanding of tax provisions applicable to Non-Resident Indians (NRIs), including income tax return filing, residential status determination, taxation of foreign and Indian-sourced income, and relief available under Double Taxation Avoidance Agreements (DTAAs).

Currently working towards attaining additional core experience in the field of Direct Taxation for, NRI’s and companies which enables to put forth the conceptual understandings in a clear way