Answer

1. F

   Facts

   RNOR (Resident but Not Ordinarily Resident) is the tax-free bridge between NRI and full Indian resident status. During RNOR, you are physically back in India but your foreign income stays exempt. This window lasts 1-2 years. Most returning NRIs don't know it exists, and lose it forever by not planning.

2. P

   Provisions and law

   • Sec 6(6)(a)
   • Sec 6(6)(b)
   • Sec 5(1), RNOR scope
3. A

   Analysis

   The biggest RNOR mistake: Returning NRI converts NRE savings account to Resident Savings Account on Day 1 of return. NRE interest was exempt. Resident savings interest: taxable. Converting too early = unnecessary tax on foreign savings. What to do during RNOR: (1) Keep NRE account as-is or convert to RFC. (2) Bring back foreign funds while exempt. (3) Sell foreign property and repatriate before becoming ROR (else capital gains taxed in India). (4) Surrender ESOPs of foreign employer (RNOR: only India-source perquisite taxed). RNOR and foreign salary: If you return but your old foreign employer pays you for work done before return: RNOR status means that salary received abroad is fully exempt. Work done in India for Indian employer: taxable from Day 1. The 2-year window math: ₹50L foreign savings earning 3% abroad = ₹1.5L/year. Under RNOR: tax-free.

4. C

   Conclusion

   1. 1Determine RNOR window duration: 9-of-10 years NRI = 2 years; fewer years = 1 year or none
   2. 2DO NOT convert NRE account to resident account immediately, keep or convert to RFC
   3. 3List all foreign income sources: salary, interest, capital gains, rental, dividends
   4. 4Plan repatriation: bring foreign funds to India before RNOR expires
   5. 5Sell foreign assets (property, investments) before becoming ROR, capital gains stay exempt
   6. 6Foreign ESOPs: exercise before RNOR expires if possible (perquisite on foreign work = exempt)

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.