Returning to India
How many RNOR years do I get, and what are they worth?
Resident but not ordinarily resident is the window after you move back where India still leaves your foreign income alone. It lasts two years for most people and three for a few. This works out how many you get and the Indian tax you do not pay in them.
Starts on an example: moving back in July 2026, on 10 years abroad. Change it to your own.
The month is enough, and it matters: come back part-way through a year and the shorter stay can buy another RNOR year.
Nine of the last ten is the first Section 6(6) test.
729 or fewer is the second test, and either one on its own is enough. Count your holidays home.
If you will still be paid from abroad
From property you keep overseas
The foreign income stacks on top of this, and that is what sets the slab
Rupee equivalent. Drives the timing advice, not the tax figure
Rupee equivalent of your foreign-currency deposit
Counted from the month you move back
2 RNOR years
₹13.1 L of Indian tax you do not pay
₹6.6 L a year for 2 years, being the slab tax, surcharge and cess India would charge on that foreign income once the window closes.
Year by year, what to do
The six months before you land
NRIPre-return runway
The months before you land are the cheapest time to restructure. Your NRI status is still intact, every action here is at NRI rates, not Resident rates.
Lock in FCNR rates before return
No FCNR balance entered. If you have foreign currency you want to park before your return, FCNR is still the cleanest option for NRI status.
Harvest foreign capital gains now
No foreign brokerage entered. If you have US 401(k), UK SIPP, or Australian super, the decision tree gets more complex, talk to a CA before you touch them.
Update Form 10F / Form 41 one last time
File the Form 10F (FY 2025-26 and earlier) or Form 41 (FY 2026-27 onward) you need for your last non-resident year before you go. It does not carry into RNOR: Section 90(4), and Section 159(8) of the 2025 Act, both open with “An assessee, not being a resident”, and an RNOR is a resident. Once you are resident under FEMA the NRO account is redesignated anyway, so there is no Section 195 deduction left for a treaty to reduce.
Form 10F / Form 41, Section 90(4) / Section 159(8)
Year 1 (RNOR)
RNORLand in India, keep foreign income tax-free
The most valuable year. Foreign salary, rent, pension and dividends stay outside Indian tax, and so do foreign capital gains. One catch worth knowing: Section 5 catches foreign income that is first RECEIVED in India even while you are RNOR, so have it paid into an account abroad and move it later.
Move NRE to RFC (not to resident savings)
Move your NRE balance into a Resident Foreign Currency account, and do it on arrival rather than at leisure. Under FEMA you are resident from the day you land, so the NRE exemption stops there, while RFC interest stays exempt for the whole RNOR window. FEMA 5(R) says NRE accounts should be redesignated or moved to RFC immediately on return. Most banks will not offer this unprompted.
Hold FCNR until maturity if possible
During RNOR, FCNR interest continues to be tax-free. Letting the deposit run its full tenure is almost always better than breaking it early, unless the tenure runs past your RNOR window.
File ITR-2 with RNOR status
You file as a Resident for the year, claim RNOR status in the return, and pay Indian tax only on Indian-sourced income (foreign income is exempt during RNOR). Schedule FA applies only from your first ordinarily-resident year, so RNOR years need none. After that, an omission inside a filed return can cost ₹10 lakh for the year under Section 43. If no return went in at all it is Section 42 instead, at the same figure. They are alternatives, not a total, and both say the officer may direct the penalty rather than must. Neither bites while your foreign assets other than immovable property stay at or below ₹20 lakh, the proviso the Finance (No. 2) Act 2024 brought in on 1 October 2024. Foreign property is outside that proviso at any value.
Section 6, ITR-2, Schedule FA, Black Money Act 2015
Indian tax not paid this year
₹6.6 L
Year 2 (RNOR)
RNORLast year of the window
Your second and final year of RNOR in most cases. Use it to sequence foreign asset exits and prepare for full-resident status next year. The Schedule FA deadline approaches.
Exit foreign long-term holdings strategically
Review every foreign holding: 401(k), ISA, RRSP, superannuation, listed stock, ETFs. Each has a different tax treatment when you become Ordinarily Resident.
Start your Schedule FA inventory
From the first ROR year, every foreign bank account, brokerage, pension, and beneficial interest must be declared in Schedule FA of your ITR. Build the list now so the first disclosure is accurate, mistakes are Black Money Act triggers.
Schedule FA, Black Money Act 2015
Close unused overseas accounts
Every overseas account you keep after RNOR ends is an annual Schedule FA reporting obligation. Close anything you don't actively use, dormant accounts are audit risk with zero upside.
Indian tax not paid this year
₹6.6 L
Year 3 (Resident)
ResidentOrdinarily Resident. Schedule FA required
RNOR window closes. You're now a full Resident. Indian tax applies to your global income and Schedule FA disclosure is compulsory in your ITR. Your FCNR deposits (if any remain) become taxable at slab rates on interest.
File Schedule FA in your ITR
Every foreign asset you hold on 31 March must be disclosed. Value, account number, country, peak balance. An omission inside a filed return costs ₹10 lakh a year under Section 43 of the Black Money Act.
Schedule FA, Section 43 BMA
Re-designate FCNR at maturity
An FCNR deposit may run to its contracted maturity after you return, then converts to a resident rupee or RFC account. Interest becomes taxable once you are ordinarily resident, at slab rates unless you elect to stay on the Chapter XII-A concessional footing for investment income from foreign-exchange assets (Section 115H, Section 217 of the 2025 Act), which is a declaration filed with the return. Ask a CA whether your deposit qualifies before assuming slab.
Claim foreign tax credit
Claim credit for tax you already paid abroad on Form 67 for FY 2025-26 and earlier, and Form 44 from tax year 2026-27. Two dates, not one: the form by twelve months after the year ends, and the return itself inside the Section 139(1) or 139(4) window, which shuts on 31 December. Miss the return date and the credit goes even with the form on time. From tax year 2026-27 an accountant has to verify the form once foreign tax reaches ₹1 lakh.
Form 67 / Form 44, Rule 128(9), Rule 76 from tax year 2026-27
A CA turns this into the actual sequence: which accounts to close, which forms to file, and what order to move the assets in.
Have a CA plan the move backChat on WhatsAppWhat to do with this number
Confirm the status itself for the year
RNOR is a Section 6(6) test on top of being resident on days. This tool assumes you are resident from the year you return.
Build the Schedule FA list before you need it
It starts the year RNOR ends, and the first one has to be right. Assemble it while the window is still open.
What happens to your NRE and FCNR accounts
They are redesignated the day you become resident under FEMA, which is a different test and a different date.
How this is worked out
- RNOR (Section 6(6)(a)): you are resident for the year but were non-resident in 9 of the 10 preceding years, or spent 729 days or fewer in India across the 7 preceding years. Either test is enough, and both sit in clause (a); clause (b) is the separate rule for a Hindu undivided family.
- The year count assumes you are in India for the whole financial year after you return. Splitting a year differently can buy another RNOR year, which is what the third-year case turns on.
- What the window is worth: the Indian tax you would pay on your foreign income if it were taxable, being the new-regime slab tax on that income stacked on top of your Indian income, plus surcharge and cess. It is not a forecast of your foreign income.
- FCNR and RFC interest stays exempt while you are non-resident or RNOR (Section 10(15)(iv)(fa) names the not-ordinarily-resident). NRE is different: its exemption under Section 10(4)(ii) hangs on being resident outside India under FEMA, and that ends the day you land, not after 182 days. So no slab saving is added for deposits; what matters is moving the NRE balance before it starts earning taxable interest.
- Foreign capital gains, foreign tax credits and treaty tie-breakers are not modelled. A CA settles those for your year.
Checked against the Income-tax Act and Rules on 11 September 2026. An estimate, not advice: your return decides.