Can I still claim treaty relief on a late ITR-2?
The claim lives inside the return's schedules, so it has to be built whether the filing is on time or years late; there is no separate route to relief that bypasses the return. Whether it is admitted turns on the facts of that year and on the schedules supporting it, which is why a late filing is rebuilt in sequence rather than assembled at speed to stop a clock. Two things come first: settle residency for the year concerned, and locate the evidence of foreign tax paid on the same income. A relief claim with no document behind it does not survive a question.
Tax was already withheld on my Indian sale — is a late return still penalised?
Withholding and the filing obligation are different things. Tax taken at source is collected before any computation is made; it is credited in the return, and until the return exists that credit has not been claimed. What a late filing costs attaches to the obligation to file. Hence the awkward case people arrive with: a sale on which the amount withheld exceeded the tax the gain eventually produced, an unfiled year, and money sitting with the department while a delay runs. The return is the instrument that recovers the difference, so filing it is the remedy for both halves of the problem.
How far back can I file my missing Indian returns?
Not every old year stays open on the same terms, and establishing that comes first, because it changes what the work can achieve. Some years can still be filed in the ordinary way. Others have passed the point at which a return is simply accepted and need a different route, and a few can only be dealt with if the department asks. So the sequence is: list the unfiled years, determine residency for each, then find out which remain open and on what basis, before a single return is prepared. Preparing returns first and discovering this afterwards wastes the effort.
Does my late Indian return affect my Canadian filing for the same year?
They run on separate timetables with separate penalties, and a gain reported in India usually appears on the Canadian return too, which is where a balance owing tends to arise. The Canadian late-filing penalty is measured on that balance: for the 2025 tax year, 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. It rises to 10 per cent plus 2 per cent for each full month, to a maximum of 20 months, 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 does not compound, but interest on the unpaid balance compounds daily.
I have not filed in India for years — where do I start?
Start with the list, not with a return. Write down every unfiled year, then settle residency separately for each one, because it turns on the facts of that year and cannot be carried across. Year by year, identify the Indian sources and the tax withheld on them. Only at that point is it sensible to open a return, and the oldest open year goes first so the sequence of filings is coherent if it is ever examined. People usually want to begin with the most recent year because it is the easiest to remember, and that is the order which produces contradictory residency positions.
Why does each late year need its own residency position?
Because residency is determined on the facts of the year and nothing else. A filer who was non-resident while abroad, resident in the year of return, and non-resident again on a later posting has a different set of consequences in each of those years, and carrying one conclusion across all of them produces returns that contradict each other. When several late years are filed together, that contradiction is plainly visible in a way it never is when years go in one at a time. Work each year from its own travel and employment record, and keep the reasoning with the file.
Do NRIs pay tax on money sent to India?
Sending your own funds to India is a transfer of capital, not income, so the remittance itself is not taxed. What is taxable is income the money then earns in India — interest, rent, capital gains — under the rules for the account type it sits in. Sending money out of India is the direction that needs certification before the bank will act. See NRE, NRO and FCNR accounts.
What is Schedule FA and who has to complete it?
It is the foreign asset disclosure in an Indian return, and the trigger is residential status rather than income: a resident discloses foreign bank accounts, custodial and equity holdings, foreign life insurance with a cash value, immovable property and other assets held at any time in the year, plus any beneficial interest. A non-resident does not. The obligation is disclosure-based, so it applies to an account that earned nothing, and the penalties under the black-money legislation are what make it worth getting right. See Schedule FA reporting.
