Returning to India

RNOR Benefits & Tax-Efficient Return

Maximize tax benefits when moving back to India with RNOR status and smart repatriation

Key Insight: As RNOR, your foreign income remains tax-free for up to 9 years after returning. This is your golden window to bring funds and restructure finances.

Understanding RNOR Status

The difference can save you lakhs in taxes

RNOR (Best)

Only Indian income taxable

Conditions:

Resident in India (182+ days)
BUT non-resident in 9 out of last 10 years, OR
In India for 729 days or less in last 7 years

Up to 9 years after return

ROR (Full Tax)

Global income taxable

Conditions:

Resident in India (182+ days)
AND resident in 2+ of last 10 years
AND in India for 730+ days in last 7 years

After RNOR period ends

Foreign Income Exempt

Your foreign salary, foreign pension, and overseas investments remain tax-free in India

Example: If you have USD 50,000 in foreign dividend income, it's not taxable as RNOR

Foreign Assets Not Taxable

Income from foreign assets (rent, capital gains) is not taxable in India

Example: Sale of US property or stocks won't attract Indian capital gains tax

No Schedule FA Filing

RNOR individuals don't need to disclose foreign assets in Schedule FA

Example: Saves compliance burden for 2-9 years after return

NRE Account Benefits Continue

Can maintain NRE accounts and earn tax-free interest during RNOR period

Example: Keep NRE FDs active for 2-9 years after returning

Smart Repatriation Strategies

Bring your money back efficiently during RNOR period

NRE Account Funds

Fully Repatriable

Anytime during RNOR period

Tax Implication:

No tax on repatriation (already post-tax)

Strategy:

Transfer before becoming ROR to avoid future complications

NRO Account Funds

Up to USD 1M/year

Start early in RNOR period

Tax Implication:

May need to pay tax on accumulated interest

Strategy:

Repatriate gradually to stay within limit

Foreign Salary Arrears

Bring via NRE account

Before RNOR period ends

Tax Implication:

Tax-free if transferred to NRE before becoming ROR

Strategy:

Receive all pending salaries in NRE account

Foreign Investments

Sell and repatriate or hold

Within 2-3 years of return

Tax Implication:

If sold during RNOR: tax-free; After ROR: taxable

Strategy:

Liquidate high-gain assets during RNOR period

Managing Your Accounts

What to do with NRE, NRO, and foreign accounts

NRE Account

Keep Active During RNOR

Benefit:

Continue earning tax-free interest

Can maintain till RNOR ends

NRO Account

Convert to Resident Account

Benefit:

Eventually must convert when ROR

Upon becoming ROR

FCNR Account

Keep Until Maturity

Benefit:

Lock-in tax-free returns

No rush to change

Foreign Bank Account

Disclose in ITR (Schedule FA)

Benefit:

Avoid penalties (₹10 lakh)

Required once you become ROR

Your Return Journey

What to expect in each phase

First Year

Likely RNOR

Determine exact residential status (calculate days)
Maintain NRE/NRO accounts - don't rush to convert
File ITR showing RNOR status
Keep foreign bank accounts active if needed

Year 2-9

RNOR Period

Maximize RNOR benefits - bring foreign funds tax-free
Sell foreign assets with gains (tax-free)
Keep track of 182-day rule each year
Plan ahead for when RNOR ends

Year 10+

Become ROR

Convert NRE/NRO to resident accounts
Disclose all foreign assets in Schedule FA
Foreign income becomes taxable
Close or restructure foreign holdings

Pro Tips:

Calculate your RNOR period accurately - it can last up to 9 years
Don't convert NRE accounts immediately - keep them active during RNOR
Sell foreign assets with large gains during RNOR (tax-free)
Repatriate NRO funds gradually (USD 1M limit/year)
Get residential status determination in writing from CA

Plan Your Return Strategically

Don't lose out on RNOR benefits. Get expert guidance on residential status, repatriation, and tax planning.