ITR Filing for NRI (Dubai) – TDS u/s 194H & ITR-2 vs ITR-3 Confusion

1) If someone is paying to NRI or on his behalf  to Power of Attorney holder, TDS required to be deducted under section 195 of the income tax Act 1961 and not under section 194H , same section (194H) is applicable to Payment made to resident Indian. 

2) After making above correction, NRI required to file ITR3 . 

( I hope someone is acting on behalf of NRI as you mentioned  in your query is  Power of Attorney holder ) 

Take more opinion on this. 

• Yes, the NRI can and should file an Income-tax Return for FY 2024-25 since income has accrued/been received in India and TDS has been deducted.

• ITR-3 is the correct form, not ITR-2, because commission income is treated as business income.

• In ITR-2, you cannot show expenses against commission income; therefore tax arises on gross receipts. To tax only net profit, the income must be reported under Profits & Gains of Business or Profession (PGBP) in ITR-3.

Thanks for replying. But in ITR 3 required to show BS also?

Yes. When you file ITR-3, you are required to furnish Balance Sheet (BS) and Profit & Loss (P&L) details. Even if turnover is small and books are not mandatorily required under section 44AA, ITR-3 still asks for a simplified BS (capital, assets, liabilities).

Since NRIs cannot opt for section 44AD and commission income is generally not covered by 44ADA, full business schedules apply.