I filed Sahaj late and received a defective return notice — what happens now?
A defective return notice means the department has looked at the form rather than the figures and found that the return you filed was not one you were entitled to use. Nothing has been completed by it, so the year is still unfiled in substance and the delay keeps running. The work is to establish which return the year actually needed, rebuild it and file that. Where the notice has been sitting unanswered for some time, the order matters: settle the residency position for the year first, because residency is what decides the form, and answer the notice in the same sequence as the replacement filing rather than afterwards.
Can a non-resident file ITR-1 at all?
No. The eligibility conditions on this form exclude non-residents, and those conditions are the whole content of the form — its simplicity is what they buy. A non-resident who files it has not made a paperwork slip; the form was never available. The practical consequence is that a late filing made on it does not cure the delay, and a filer who believes the year is closed tends to find out from a notice rather than from the acknowledgement. Settle residency for the year, let the form follow from it, and only then is there any point discussing what the delay has cost.
Do I owe a penalty on a late Sahaj if no tax is due?
Treat those as two separate questions. What you owe is one computation; what a late filing costs is charged by reference to the form and the delay, which is why a year with nothing owing can still be expensive. There is a second reason to file the simplest possible year — salary, one house property, nothing else — even when the computation comes to nothing. A filed year is a year you can point at later, when a bank, a buyer, a visa officer or another tax authority asks what your Indian position was. An unfiled nil year answers none of them.
I sold a flat in India — was Sahaj the wrong form?
Capital gains sit outside this form, so a sale year is not a Sahaj year. That holds even where every other source is simple, and even where the gain produces little or no tax once the cost of acquisition and improvement is taken into account. If a late return has already gone in on this form for a sale year, expect it to come back as defective rather than to be assessed. The useful work is to gather the purchase and improvement records before touching any form, because a sale year is won or lost on the gain computation and not on the choice of return.
Can I use Sahaj if I own two houses in India?
No. More than one house property takes the year outside this form, and the test is on what is held rather than on whether both produce income. People come unstuck on an inherited share in a family property, which counts even where nothing is received from it. A late return filed on this form for such a year buys nothing and has to be rebuilt on a return that carries the property schedules. Establish what is held and in what share first. That question is usually slower to answer than the filing itself, and it is the reason these years drift.
My Indian return was simple — will my Canadian return be penalised too?
They are charged on different logic, which is worth knowing before deciding which year to deal with first. The Canadian late-filing penalty is measured on the balance owing: for the 2025 tax year it is 5 per cent of the balance owing plus 1 per cent for each full month the return is late, to a maximum of 12 months. The higher rate, 10 per cent plus 2 per cent for each full month to a maximum of 20 months, applies where the Canada Revenue Agency issued a demand to file and charged a late-filing penalty in any of the three preceding tax years. The penalty itself does not compound; interest compounds daily on the unpaid balance.
Do NRIs have to file an Indian tax return?
If you have Indian-source income above the filing threshold, or you want a refund of tax withheld at source, or you are claiming treaty relief — then yes. Interest, rent, capital gains on Indian shares or property, and TDS deducted at a rate higher than your real liability all commonly force or reward a return. Filing is also how a lower-rate treaty claim and a foreign tax credit get onto the record. See NRI tax return filing.
What is the Liberalised Remittance Scheme?
The Reserve Bank of India framework under which a resident individual may remit up to an annual ceiling for permitted purposes — education, medical treatment, travel, maintenance of relatives, investment in shares or property abroad — with gifts and loans to non-residents inside the same ceiling. You declare the purpose to the bank on Form A2. The ceiling and the excluded purposes are set by the RBI and have changed more than once, so the figure to work from is the one current at the date of the transfer. See Form A2 and LRS remittances.
