Answer

ITR

Claim back high TDS on NRO interest

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  1. Facts

    Banks deduct TDS on NRO interest at high flat rates for non-residents. If your total Indian income is low, filing ITR-2 lets you get the excess back.

  2. Provisions and law

    • Sec 195, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025)Tax is deducted on payments to non-residents at the rates in force.
    • Sec 139(1), Income-tax Act 1961 (now Sec 263(1), Income-tax Act 2025)Return is required when total income exceeds the basic exemption limit or a set condition applies.

  3. Analysis

    Say NRO interest was ₹3,00,000 and TDS was about ₹93,600. If that is your only Indian income, under the new regime slabs for FY 2025-26, tax on ₹3 lakh is nil. You can claim nearly all TDS back by filing. Note NRIs do not get the Sec 87A rebate, so compute carefully if income is higher.

  4. Conclusion

    1. Download Form 26AS for TDS.
    2. Compute tax on total Indian income.
    3. File ITR-2 claiming the refund.
    4. Validate a bank account for the refund.

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