NRI Compliance Scorecard -- Rate Your Tax & FEMA Compliance 0-100 (2026)

By CA Mayank Wadhera (CA | CS | CMA | IBBI Registered Valuer), MKW Advisors | Legal Suvidha | DigiComply

Last Updated: March 2026 | Applicable for FY 2025-26 (AY 2026-27)

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How compliant are you, really?

Most NRIs believe they are "mostly compliant" with Indian tax and FEMA regulations. They file their returns, maintain an NRO account, and assume the rest will sort itself out. But the reality is far more unforgiving. A single missed form, an unreported bank account, or a wrong ITR form can trigger notices, penalties, and in some cases, prosecution proceedings under the Black Money Act or FEMA.

The Indian regulatory landscape for NRIs in FY 2025-26 is more interconnected than ever. The Income Tax Department now cross-references AIS (Annual Information Statement) data with banking transactions, property registrations, and even foreign remittance records. RBI's FEMA enforcement has become sharper, with compounding penalties for even inadvertent violations. And if you are a US-based NRI, the IRS expects full disclosure of your Indian financial life through FBAR and FATCA filings.

This is not a theoretical exercise. This is a practical, question-by-question scorecard that will tell you exactly where you stand -- and exactly what to fix before the assessment window closes.

Take 15 minutes. Answer honestly. Score yourself out of 100.

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How the Scorecard Works

There are 20 questions divided across four critical compliance areas. Each question is worth 5 points. Answer "Yes" and you earn the full 5 points. Answer "No" and you score 0 for that question. There is no partial credit -- compliance is binary.

Grab a pen. Let us begin.

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SECTION A: TAX FILING (25 Points)

This section evaluates the foundation of your Indian tax compliance -- whether you are filing correctly, on time, and with full awareness of the regime that benefits you most.

Question 1: Did you file your ITR for the most recent Financial Year on time? (5 Points)

What it means: For FY 2024-25 (AY 2025-26), the due date for NRIs without audit requirements was July 31, 2025. If you had a tax audit obligation, the deadline extended to October 31, 2025. Filing after these dates means a belated return under Section 139(4).

Why it matters: Late filing attracts a penalty of up to Rs 5,000 under Section 234F. More critically, it disqualifies you from carrying forward certain losses (capital losses, business losses) that could have been set off against future income. A belated return also limits your ability to revise the return, and it signals non-compliance in the Department's risk-scoring algorithms, increasing the probability of scrutiny selection.

How to fix it: If you have not filed for FY 2024-25, file immediately as a belated return before the deadline of December 31, 2025 (for AY 2025-26). For FY 2025-26, set a calendar reminder for July 2026 and begin gathering documents by April. Engage a professional early -- do not wait until the last week of July.

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Question 2: Did you use the correct ITR form (ITR-2 or ITR-3, not ITR-1)? (5 Points)

What it means: NRIs are explicitly barred from using ITR-1 (Sahaj). If your income includes salary, capital gains, house property, or foreign income, ITR-2 is the correct form. If you have business or professional income in India, ITR-3 is required.

Why it matters: Filing using the wrong form is treated as a defective return under Section 139(9). The Department issues a notice giving you 15 days to rectify. If you fail to respond, the return is treated as if it was never filed -- meaning all the consequences of non-filing apply, including loss of refunds and carry-forward benefits. In recent assessment cycles, the Department has been particularly aggressive about form mismatches flagged through automated processing.

How to fix it: If you filed ITR-1 in error for a prior year, file a revised or updated return (under Section 139(8A) for up to 48 months from end of AY) using the correct form. For FY 2025-26, confirm your form eligibility before filing. ITR-2 covers most NRI scenarios. If in doubt, consult a CA who specializes in NRI taxation.

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Question 3: Did you reconcile your AIS/26AS before filing? (5 Points)

What it means: The Annual Information Statement (AIS) and Form 26AS are the Department's consolidated records of your financial transactions and TDS credits in India. AIS now captures interest income, dividend income, property transactions, mutual fund purchases and redemptions, foreign remittances, and more. Form 26AS reflects TDS/TCS credits and advance tax payments.

Why it matters: Any mismatch between what you report in your ITR and what the Department already knows from AIS/26AS triggers automated flags. These mismatches are the single largest source of Section 143(1) intimations and demand notices for NRIs. Common issues include unreported bank interest from dormant NRO accounts, dividend income from legacy equity holdings, and TDS credits that were deducted but not claimed.

How to fix it: Before filing your ITR for FY 2025-26, log into the Income Tax portal and download both your AIS and Form 26AS. Cross-check every entry. If AIS shows income you did not receive (duplicate entries, incorrect attributions), use the feedback mechanism on the AIS portal to dispute it before filing. Reconciliation is non-negotiable.

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Question 4: Did you claim all TDS credits? (5 Points)

What it means: As an NRI, TDS is deducted at higher rates on most Indian income -- 30% on NRO interest (plus surcharge and cess), 20-30% on property sale proceeds, 10% on dividends. These credits must be claimed in your ITR to get refunds or reduce your tax liability.

Why it matters: Unclaimed TDS credits mean you are effectively overpaying tax. Many NRIs, especially those with multiple bank accounts or investment accounts, miss TDS credits because they do not consolidate all their Form 26AS entries. The Department does not automatically refund unclaimed credits -- you must claim them through filing.

How to fix it: Pull your consolidated Form 26AS and verify every TDS entry against your bank statements, broker statements, and property transaction records. Ensure your PAN is correctly linked to all deductors. If TDS was deducted but not reflected in 26AS, contact the deductor and ask them to file a correction in their TDS return.

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Question 5: Did you compare the old regime vs new regime before filing? (5 Points)

What it means: From FY 2024-25 onwards, the new tax regime (Section 115BAC) is the default. NRIs must actively opt for the old regime if it benefits them. The new regime offers lower slab rates but eliminates most deductions (Section 80C, 80D, HRA, etc.). The old regime retains all deductions but at higher base rates.

Why it matters: The optimal regime depends entirely on your income profile and deduction eligibility. NRIs with significant home loan interest (Section 24), insurance premiums, or NPS contributions may save substantially under the old regime. Those with straightforward salary or interest income and few deductions will benefit from the new regime. Filing under the wrong regime without comparison can cost lakhs in unnecessary tax.

How to fix it: Before filing for FY 2025-26, run a parallel computation under both regimes. Use your actual income and deduction figures, not estimates. Factor in DTAA benefits, which apply regardless of regime. Choose deliberately, not by default. If you filed under the wrong regime for a prior year, you may be able to revise if the window is still open.

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SECTION B: TDS COMPLIANCE (25 Points)

This section addresses the most common area of NRI tax leakage -- TDS deductions, treaty benefits, and foreign tax credits that are routinely missed or incorrectly applied.

Question 6: Did you apply for a Section 197 certificate before selling property? (5 Points)

What it means: When an NRI sells property in India, the buyer is legally required to deduct TDS at 12.5% (for long-term gains, effective FY 2024-25 onwards) or 30% (for short-term gains) on the total sale consideration -- not on the profit. Section 197 allows the NRI seller to apply to the Assessing Officer for a lower or nil TDS certificate based on the actual estimated capital gain.

Why it matters: Without a Section 197 certificate, TDS is deducted on the full sale price. On a Rs 1 crore property where your actual gain is Rs 20 lakhs, TDS without the certificate could be Rs 12.5 lakhs or more, versus actual tax liability of Rs 2-3 lakhs. The excess is refunded only after filing your ITR and processing, which can take 12-18 months. That is capital locked up unnecessarily.

How to fix it: If you are planning to sell property in FY 2025-26, apply for a Section 197 certificate well in advance of the transaction. You will need your PAN, computation of expected capital gains, and supporting documents. The process typically takes 4-6 weeks. If you already sold without the certificate, file your ITR promptly and claim the refund.

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Question 7: Did you submit TRC + Form 10F to all your Indian banks? (5 Points)

What it means: A Tax Residency Certificate (TRC) from your country of residence, along with Form 10F (self-declaration of residency details), enables your Indian banks and financial institutions to apply DTAA (Double Taxation Avoidance Agreement) rates on TDS instead of the higher domestic rates.

Why it matters: Without TRC and Form 10F, your NRO interest is taxed at 30% plus surcharge and cess (effectively around 31.2%). Under most DTAAs, this rate drops to 10-15%. For a US NRI with Rs 10 lakhs in NRO interest, the difference is approximately Rs 1.5-2 lakhs per year. Most banks will not apply DTAA rates without these documents on file, and they must be submitted annually.

How to fix it: Obtain your TRC from the tax authority in your country of residence (IRS for US, HMRC for UK, ATO for Australia). Fill out Form 10F on the Indian Income Tax portal (it is now mandatory to file electronically). Submit both to every Indian bank and financial institution where you hold accounts. Do this at the start of every financial year.

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Question 8: Did you file Form 67 for Foreign Tax Credit (FTC) claims? (5 Points)

What it means: If you have paid tax on Indian income in your country of residence as well (or vice versa), you can claim a Foreign Tax Credit to avoid double taxation. Form 67 is the mandatory form to claim this credit in India, and it must be filed before or along with your ITR.

Why it matters: Without Form 67, the FTC claim is invalid. Recent tribunal rulings have provided some relief for late filing, but the Department continues to reject FTC claims where Form 67 was not filed. This means you end up paying full tax in both countries on the same income -- the exact situation that DTAAs are designed to prevent.

How to fix it: For FY 2025-26, file Form 67 electronically on the Income Tax portal before submitting your ITR. You will need proof of foreign tax paid (tax return from the other country, tax payment receipts). Ensure the income amounts and tax credits match across both countries' filings.

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Question 9: Do you verify Form 26AS at least quarterly? (5 Points)

What it means: Form 26AS is a living document that gets updated every quarter as deductors file their TDS returns. Checking it only at the time of ITR filing means you may discover discrepancies too late to correct them within the relevant TDS return filing deadline.

Why it matters: If a bank or buyer deducted TDS but did not deposit it or did not file their TDS return correctly, the credit will not appear in your 26AS. Discovering this in July when you are filing means you have to chase the deductor months after the transaction. Quarterly checks give you time to identify and resolve issues while the deductor's compliance window is still open.

How to fix it: Set quarterly reminders (July, October, January, April) to log into the TRACES portal or Income Tax portal and review your 26AS. Cross-check each entry against your bank statements and transaction records. If any TDS credit is missing, contact the deductor immediately.

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Question 10: Did you claim DTAA benefit on NRO interest income? (5 Points)

What it means: Interest earned on NRO deposits is taxable in India. However, under most DTAAs, the tax rate is capped at 10-15% instead of the domestic rate of 30% plus surcharge and cess. This benefit must be actively claimed through your bank (via TRC and Form 10F) or in your ITR.

Why it matters: This is one of the most commonly missed benefits for NRIs. Banks default to the 30% TDS rate unless treaty documents are on file. Even if you miss the bank-level benefit, you can claim the DTAA rate in your ITR and get a refund of the excess TDS. But many NRIs do not realize this option exists and simply accept the higher deduction.

How to fix it: First, submit TRC and Form 10F to your bank for prospective relief (see Question 7). Second, when filing your ITR, declare NRO interest income and claim the DTAA rate. If TDS was deducted at 30% but the treaty rate is 15%, the excess 15% becomes a refundable credit. Ensure you report the correct DTAA article and country in Schedule TR of your ITR.

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SECTION C: BANKING & FEMA (25 Points)

FEMA violations carry compounding penalties of up to three times the amount involved. This section tests whether your banking structure is legally sound.

Question 11: Did you convert all resident savings/current accounts to NRO upon becoming an NRI? (5 Points)

What it means: Under FEMA regulations, the moment you become a non-resident (based on your purpose and duration of stay abroad), all your existing resident bank accounts must be redesignated as NRO (Non-Resident Ordinary) accounts. You cannot continue operating a resident savings or current account as an NRI.

Why it matters: Operating a resident account as an NRI is a direct FEMA violation. The RBI treats this seriously because it circumvents foreign exchange controls and reporting requirements. Penalties under FEMA Section 13 can be up to three times the amount involved in the contravention, with daily penalties for continuing violations. Banks are now more actively identifying and flagging such accounts through KYC updates.

How to fix it: Contact every bank where you hold a resident account and request redesignation to NRO. You will need to provide your passport with visa/immigration stamps, proof of overseas address, and updated KYC documents. Do not close the account and open a new one -- redesignation preserves your account history and is the legally correct process.

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Question 12: Do you maintain separate NRE accounts for foreign income and NRO accounts for Indian income? (5 Points)

What it means: NRE (Non-Resident External) accounts are for parking foreign earnings in India. Funds are freely repatriable and interest is tax-free in India. NRO accounts are for Indian-source income (rent, dividends, pension). Interest on NRO is taxable. Mixing the two creates accounting chaos and potential FEMA issues.

Why it matters: Depositing Indian income into an NRE account is a FEMA violation -- NRE accounts can only receive inward remittances from abroad or transfers from other NRE/FCNR accounts. Conversely, depositing foreign earnings into an NRO account means you lose the tax-free interest benefit and the funds become subject to repatriation limits (USD 1 million per financial year after tax and compliance). Proper segregation is both a legal requirement and a financial optimization.

How to fix it: Open both NRE and NRO accounts if you do not already have them. Route all foreign salary and overseas income through NRE. Route all Indian rental income, dividends, pension, and asset sale proceeds through NRO. Review the last 12 months of transactions to ensure no cross-contamination. If violations have occurred, consult a FEMA specialist about voluntary disclosure and compounding.

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Question 13: Did you file Form 15CA/15CB for NRO repatriation? (5 Points)

What it means: Any remittance from India to a foreign account (except for a few exempt categories) requires Form 15CA (online declaration by the remitter) and, for amounts above Rs 5 lakhs in a financial year, Form 15CB (certificate from a Chartered Accountant). These forms certify that applicable taxes have been paid and the remittance is FEMA-compliant.

Why it matters: Banks will not process remittances without 15CA/15CB. More importantly, these forms are automatically reported to the Income Tax Department. If you somehow managed a remittance without these forms (through non-compliant channels or bank errors), the Department has the data to flag it. Non-filing attracts penalties under Section 271-I of up to Rs 1 lakh per transaction.

How to fix it: For future repatriations, engage a CA to prepare Form 15CB and file Form 15CA on the Income Tax portal before approaching the bank. Ensure the underlying income has been properly taxed and the remittance is within the USD 1 million annual limit for NRO repatriation. Keep copies of all filed forms and bank confirmations.

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Question 14: Are your outward remittances within LRS limits? (5 Points)

What it means: The Liberalized Remittance Scheme (LRS) allows resident individuals to remit up to USD 2,50,000 per financial year for permitted purposes. While this primarily applies to residents sending money out of India, NRIs need to be aware of LRS in the context of their resident family members making remittances on their behalf and when they have resident status for part of the year. TCS at 20% (above Rs 7 lakhs) applies on LRS remittances for certain purposes from October 2023 onwards.

Why it matters: Exceeding LRS limits or using LRS for non-permitted purposes is a FEMA contravention. The 20% TCS on remittances above Rs 7 lakhs (for non-education, non-medical purposes) is a significant cash flow impact that must be factored into planning. For NRIs transitioning between resident and non-resident status in a year, tracking which regime applies to which remittance is critical.

How to fix it: Maintain a running log of all remittances made during the financial year, categorized by purpose. Ensure TCS is being collected and reflected in your Form 26AS. If you are approaching the LRS limit, plan remaining remittances carefully and explore whether alternative structures (such as NRO repatriation, which has its own separate limit) are more appropriate.

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Question 15: Have you ensured no Indian income is received in a resident or foreign bank account? (5 Points)

What it means: All Indian-sourced income -- rent, interest, dividends, capital gains, pension -- must be received in your NRO account. It should not be deposited into a resident account (which you should no longer have) or directly into your overseas bank account (which creates reporting complications in both countries).

Why it matters: Receiving Indian income in a foreign account without proper routing through NRO means the income may not be captured in Indian TDS and reporting systems, potentially leading to tax evasion allegations. It also creates FEMA violations since the payer is making an unauthorized foreign remittance. From your country of residence's perspective, untracked Indian income arriving in your local account can trigger tax authority inquiries.

How to fix it: Audit all sources of Indian income and verify the receiving account for each. Redirect any income currently going to non-NRO accounts. For rental income, give your tenant your NRO account details. For dividends and interest, update your bank and demat account details to reflect NRO. For pension, update your employer or pension fund.

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SECTION D: INVESTMENT & PLANNING (25 Points)

This section covers the forward-looking compliance items that most NRIs neglect until a crisis forces their attention.

Question 16: Did you report your Indian investments in your country of residence? (5 Points)

What it means: Most countries require their tax residents to disclose foreign financial assets. US residents must report through FATCA (Form 8938), FBAR (FinCEN 114), and relevant schedules. UK residents report through the Self Assessment. Australian residents disclose foreign income and assets in their tax return. Canada requires Form T1135 for foreign assets exceeding CAD 100,000.

Why it matters: Under CRS (Common Reporting Standard) and FATCA, Indian financial institutions are already reporting your account information to your country of residence's tax authority. If they have the data and you have not reported it, the consequences range from substantial penalties (FBAR non-filing penalties can reach USD 10,000 per account per year for non-willful violations, and much more for willful violations) to criminal prosecution in extreme cases.

How to fix it: Compile a complete list of all Indian financial assets -- bank accounts, fixed deposits, mutual funds, stocks, real estate, insurance policies, PPF, EPF. Report these through the appropriate forms in your country of residence. If you have years of non-filing to address, consult a cross-border tax specialist. For US NRIs, the Streamlined Filing Compliance Procedures may offer a path to become compliant without penalties.

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Question 17: If you are a US NRI with Indian accounts exceeding USD 10,000 at any point in the year, did you file FBAR? (5 Points)

What it means: FBAR (Foreign Bank Account Report, FinCEN Form 114) must be filed by any US person (citizen, green card holder, or resident alien) who has a financial interest in or signature authority over foreign financial accounts with an aggregate value exceeding USD 10,000 at any time during the calendar year. The deadline is April 15 with an automatic extension to October 15.

Why it matters: FBAR penalties are among the most severe in the US tax code. Non-willful penalties are up to USD 10,000 per violation (per account, per year). Willful violations carry penalties of up to USD 100,000 or 50% of the account balance, whichever is greater, plus potential criminal prosecution. The IRS has been aggressively pursuing FBAR cases, and Indian account information flows automatically to the IRS through FATCA.

How to fix it: If you are a US NRI and have not been filing FBAR, do not ignore this. The Streamlined Domestic Offshore Procedures (for US-based filers) or Streamlined Foreign Offshore Procedures (for those living abroad) allow you to file 3 years of amended tax returns and 6 years of FBARs with reduced or zero penalties, provided the non-compliance was non-willful. Engage a US-India cross-border tax attorney or CPA immediately.

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Question 18: Does your will specifically and separately cover Indian assets? (5 Points)

What it means: A will executed in your country of residence may not be recognized or enforceable in India for Indian assets. Indian succession law, property transfer rules, and probate requirements differ significantly from most common-law countries. A separate Indian will that specifically covers Indian assets (property, bank accounts, investments) is strongly recommended.

Why it matters: Without a valid Indian will, your heirs face the intestate succession process in India, which is governed by personal law (Hindu Succession Act, Indian Succession Act, or Muslim Personal Law depending on religion). This process involves obtaining succession certificates or letters of administration from Indian courts -- a process that routinely takes 1-3 years and involves significant legal costs. During this time, assets are frozen and cannot be accessed.

How to fix it: Engage an Indian lawyer to draft a will that covers all your Indian assets. Ensure it does not conflict with your overseas will (the overseas will should explicitly exclude Indian assets if you have a separate Indian will). Register the Indian will with the relevant Sub-Registrar's office for added legal certainty, though registration is not mandatory for validity.

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Question 19: Are nominees updated on all your Indian bank accounts, demat accounts, and investments? (5 Points)

What it means: Nomination is the process of designating a person who can receive the assets in your Indian accounts in the event of your death. It is distinct from succession and acts as a custodial transfer mechanism. SEBI has made nomination mandatory for demat accounts, and banks encourage it for all accounts.

Why it matters: Without a nominee, banks and institutions freeze the account upon the holder's death and require a succession certificate or probate order before releasing funds. With a nominee, the transfer is procedurally faster (though the nominee holds the assets as a trustee for the legal heirs). For NRIs, where heirs are often abroad and unable to visit Indian banks in person, having updated nominees dramatically reduces the administrative burden on your family.

How to fix it: Log into each Indian bank's net banking portal or visit the branch and verify nominee details. For demat accounts, check through your broker's portal or CDSL/NSDL. Update nominees if they are outdated (e.g., if your nominee has also become an NRI or has predeceased you). Ensure nominee details are consistent with your will to avoid conflicts.

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Question 20: Do you track your day count in India throughout the year? (5 Points)

What it means: Your residential status under the Income Tax Act (Resident, Not Ordinarily Resident, or Non-Resident) is determined by the number of days you spend in India during the financial year and the preceding years. The thresholds are 182 days (general rule), 120 days (for Indian income exceeding Rs 15 lakhs), and 60 days (for certain categories). One day over the threshold and your entire global income becomes taxable in India.

Why it matters: Residential status is the single most consequential determination in NRI taxation. An NRI who is actually a "deemed resident" must pay tax on worldwide income in India. Many NRIs visit India for extended periods (family events, medical treatment, remote work during the pandemic era) without tracking days, and inadvertently cross the threshold. The Department now has access to immigration data and can verify your day count independently.

How to fix it: Maintain a travel log with exact entry and exit dates for every India visit. Count each financial year separately (April 1 to March 31). Include arrival and departure days in the count (both days count). If you are approaching 150 days, be extremely cautious about additional visits. Use a digital tracker or spreadsheet that calculates your running total in real time. If you have crossed the threshold unknowingly, consult a tax advisor immediately about the implications for your filing obligations.

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Calculate Your Score

Tally your points across all four sections.

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Your Action Plan Based on Score

Score 90-100: Excellent

You are in the top tier of NRI compliance. Your filings are timely, your banking structure is correct, and you have addressed cross-border reporting requirements. Your action items are incremental: verify DTAA rates annually as treaties get renegotiated, keep nominee and will documents current, and stay alert to regulatory changes (the Finance Act 2025 introduced several NRI-relevant amendments). Consider an annual compliance audit to maintain this standard.

Score 70-89: Good

You have a solid compliance foundation but material gaps exist. The areas where you scored zero are not minor oversights -- each represents a specific regulatory exposure. Prioritize the missed items by penalty severity: FBAR non-filing (if applicable) and FEMA violations carry the highest consequences. Schedule a professional review within the next 30 days to close these gaps before they attract attention.

Score 50-69: Needs Work

Multiple compliance failures across different areas suggest a systemic issue rather than isolated oversights. You likely need professional help to (a) assess the cumulative risk of past non-compliance, (b) develop a remediation roadmap, and (c) implement systems to prevent recurrence. Do not attempt to fix everything simultaneously -- prioritize based on statute of limitation windows and penalty exposure. A CA with NRI specialization should be your first call.

Score Below 50: At Risk

This score indicates fundamental gaps in your compliance framework. The risk is not theoretical -- with AIS data matching, CRS reporting, and FEMA enforcement all operating at full capacity in 2026, detection is a matter of when, not if. You need immediate professional intervention. Consider voluntary disclosure programs where available (Streamlined Procedures for US NRIs, compounding applications for FEMA violations). The cost of professional remediation now is a fraction of the penalties, interest, and prosecution costs you face if the authorities reach you first.

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Frequently Asked Questions

1. I scored below 50. Will I definitely face penalties?

Not necessarily immediately, but the risk is high and increasing every year. The Income Tax Department and RBI are both investing heavily in data analytics and cross-referencing. A low score means you have multiple exposure points. The question is not whether the authorities will detect the non-compliance, but when. Proactive remediation almost always results in better outcomes than responding to notices.

2. I have been an NRI for 10 years and never filed an Indian ITR. Is it too late?

It is never too late to become compliant. If you had no Indian income, you may not have had a filing obligation. But if you had Indian income (even NRO interest), you should have been filing. You can file updated returns under Section 139(8A) for up to 48 months from the end of the relevant assessment year. For older years, consult a professional about the best approach -- voluntary disclosure before a notice is always preferable to responding after one.

3. My Indian bank already deducts TDS. Why do I still need to file an ITR?

TDS is not a final tax -- it is an advance collection. Your actual tax liability may be lower than TDS deducted (especially if you claim DTAA benefits or have losses to set off), in which case you are entitled to a refund. Conversely, if you have multiple income sources, TDS on each may be at a lower rate than your total blended rate, and you may owe additional tax. Either way, the ITR is required to reconcile and finalize.

4. What if I became an NRI mid-year? How does the scorecard apply?

Your residential status is determined for the entire financial year, not mid-year. If you left India on September 15, 2025, and did not return, you were a resident from April 1 to September 15 and the total days in India exceed 182, making you a resident for FY 2025-26. The scorecard questions about NRI-specific obligations (NRO accounts, 15CA/15CB, etc.) apply only for years in which you are a confirmed non-resident under Section 6 of the Income Tax Act.

5. Do DTAA benefits apply automatically, or do I have to claim them?

You must actively claim DTAA benefits. They are not applied automatically by the Department or by most banks. At the bank level, you need to submit TRC and Form 10F. At the ITR level, you need to fill Schedule TR and claim the appropriate treaty rate. If you do not claim, you do not receive the benefit. This is one of the most common NRI tax overpayment causes.

6. I hold property in India but live abroad. Which questions are most critical for me?

Questions 6 (Section 197), 13 (15CA/15CB), 15 (income routing), 18 (Indian will), and 19 (nominees) are particularly critical for property-holding NRIs. Property transactions involve the highest absolute values and therefore the highest penalty exposure. A property sale without Section 197 can lock up 12.5-30% of the sale price in excess TDS for over a year. And without a proper Indian will, your property becomes the most difficult asset for heirs to inherit.

7. I am a US NRI. Which items carry the highest penalty risk?

FBAR non-filing (Question 17) carries the highest penalty risk by far, with potential penalties exceeding 50% of account balances for willful violations. FATCA non-compliance (Question 16) can result in a USD 10,000 penalty per form, increasing to USD 50,000 for continued failure. On the India side, FEMA violations (Questions 11-15) carry penalties of up to three times the amount involved. Prioritize these items above all others.

8. How often should I retake this scorecard?

Retake the scorecard at the beginning of every financial year (April) and again before filing your ITR (June-July). Your compliance status can change year to year based on new transactions (property sales, new investments), changes in law (Finance Act amendments, DTAA renegotiations), and changes in your personal situation (change of country, change of residential status). An annual self-assessment keeps you proactive rather than reactive.

9. Can I fix my FEMA violations without facing penalties?

FEMA allows for compounding of contraventions under Section 15. Compounding is essentially a settlement mechanism where you disclose the violation, pay a compounding fee (which is typically much lower than the maximum penalty), and receive an order that closes the matter. The RBI has a published compounding matrix with fee guidelines. Voluntary compounding before detection is viewed more favorably and typically results in lower fees. Consult a FEMA specialist before initiating the process.

10. What is the one thing I should do immediately after taking this scorecard?

If you scored below 70, the single most impactful action is to schedule a consultation with a Chartered Accountant who specializes in NRI taxation and FEMA compliance. Not a general CA -- specifically one with cross-border expertise. Many of the items on this scorecard are interconnected (DTAA benefits affect both your Indian ITR and your overseas filing; FEMA compliance affects your banking which affects your TDS which affects your ITR). A specialist can see the full picture and prioritize your remediation effectively.

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Take Action Now

Your compliance score is not permanent. Every "No" on this scorecard can be converted to a "Yes" with the right guidance and timely action. The regulatory window for voluntary correction is always more favorable than responding to notices.

MKW Advisors specializes in end-to-end NRI tax, FEMA, and cross-border compliance. Whether you scored 90 and want to maintain your standard, or scored 40 and need urgent remediation, we can help.

Book a consultation: Schedule on our client portal

WhatsApp: +91-96677 44073 -- Share your scorecard results and get a preliminary assessment.

Email: [email protected]

Do not let another financial year pass with gaps in your compliance. The cost of fixing things today is always lower than the cost of explaining them tomorrow.

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Disclaimer: This scorecard is for educational and self-assessment purposes only. It does not constitute legal or tax advice. Individual circumstances vary, and professional consultation is recommended before taking action on any compliance matter. Tax laws and FEMA regulations are subject to change, and the information presented reflects the position as understood for FY 2025-26.

CA Mayank Wadhera is the founder of MKW Advisors and provides NRI tax, FEMA, and cross-border compliance advisory through Legal Suvidha and the DigiComply platform.