RNOR status for returning NRIs: who qualifies and what India taxes
Coming back to India after years abroad does not make all your foreign income taxable at once. Resident but not ordinarily resident status can shield it for a limited period, if you meet the conditions.
Reviewed by Vijay Dhawan, Managing Partner, LexVerge LLP, on · Published
Quick answer
A returning NRI who becomes resident is resident but not ordinarily resident (RNOR) if they were non-resident in 9 of the 10 preceding tax years, or were in India for 729 days or less in the 7 preceding years. An RNOR pays Indian tax on Indian income only, plus foreign income from a business controlled or a profession set up in India; salary, interest and rent earned abroad stay outside Indian tax. The rules are in section 6 of the Income-tax Act, 2025, which applies from tax year 2026-27.
Step 1: are you resident at all?
For tax year 2026-27 an individual is resident in India if either test is met:
- in India for 182 days or more in the tax year; or
- in India for 60 days or more in the tax year and 365 days or more in the four preceding years.
Two variations change the 60-day test. For an Indian citizen or person of Indian origin visiting India whose Indian income exceeds ₹15 lakh, it becomes 120 days. For an Indian citizen who leaves India for employment abroad or as a ship’s crew member, it becomes 182 days. If neither test is met, you are non-resident and only Indian income is taxed.
Step 2: resident, or RNOR?
A resident individual is not ordinarily resident if either of these is true:
| Test | You are RNOR if |
|---|---|
| Non-resident years | You were non-resident in 9 out of the 10 tax years before this one |
| Days in India | Your total stay in India in the 7 tax years before this one was 729 days or less |
Two more groups are RNOR by definition: an Indian citizen or person of Indian origin who becomes resident only because of the 120-day rule (a stay of 120 to 181 days with Indian income above ₹15 lakh), and an Indian citizen who is deemed resident because their Indian income exceeds ₹15 lakh and they are not liable to tax in any other country by reason of residence.
What an RNOR pays tax on
| Income | Non-resident | RNOR | Resident (ordinary) |
|---|---|---|---|
| Indian salary, rent, interest, capital gains | Taxed | Taxed | Taxed |
| Foreign income received or arising abroad | Not taxed | Not taxed | Taxed |
| Foreign income from a business controlled in India or a profession set up in India | Not taxed | Taxed | Taxed |
| Income received in India, wherever earned | Taxed | Taxed | Taxed |
Money already earned abroad and later brought into India is not income in the year it is brought in. Interest that a foreign bank keeps paying while you are RNOR is foreign income and stays outside Indian tax; once you become ordinarily resident, it is taxed and must be disclosed.
How long RNOR status lasts
There is no fixed term: you test each year. Someone who lived abroad for a decade or more usually remains RNOR for two or three tax years after returning, until the 729-day count in the preceding seven years is crossed or fewer than 9 of the 10 preceding years were non-resident. Keep passport stamps and travel records; the day count is yours to prove.
Use the RNOR years to plan: move foreign bank deposits, decide on foreign retirement accounts and sell foreign assets while gains are still outside Indian tax, and set up Indian accounts correctly. Under FEMA, NRE accounts must be redesignated as resident accounts once you return for good; FCNR deposits can run to maturity.
Disclosure once you become ordinarily resident
An ordinarily resident individual reports all foreign assets and foreign income in the income-tax return, including Schedule FA, even where no tax is due on them. RNORs are not required to fill Schedule FA. Missing foreign assets once you are ordinarily resident can trigger the Black Money Act, so the switch year matters.
For filing as a non-resident or RNOR, see our NRI ITR filing service and the broader NRI tax guide.
Frequently asked questions
What is RNOR status?
Resident but not ordinarily resident: a resident individual who was non-resident in 9 of the 10 preceding tax years, or in India for 729 days or less in the 7 preceding years. An RNOR is taxed on Indian income only, plus foreign income from a business controlled or profession set up in India.
How many years can a returning NRI stay RNOR?
There is no fixed number; status is tested every year. A person who lived abroad for ten years or more typically stays RNOR for two to three tax years after returning.
Is foreign salary taxable for an RNOR?
No, if it is earned and received abroad for work done abroad. It becomes taxable once you are ordinarily resident, or if it is received in India.
Does an RNOR have to fill Schedule FA?
No. Schedule FA is for ordinarily resident individuals. Disclosure starts in the first year you are ordinarily resident.
Which section governs RNOR under the new Income-tax Act?
Section 6 of the Income-tax Act, 2025, which applies from tax year 2026-27. The tests are the same as under the 1961 Act.
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Official references
The statutory sources behind this page. We keep our guidance aligned to them: verify anything time-sensitive directly.
- Ministry of Corporate AffairsCompanies Act filings, forms and fee schedules
- Income Tax DepartmentReturns, forms, rates and e-filing utilities
- GST PortalRegistration, returns and rate notifications
Facts on this page are checked against these sources; the date of the last check is shown at the top of the page. It is general guidance, not advice on your specific facts. How we write and check our guides.