Find
Your entire India tax liability depends on residential status. A person who has lived abroad for 2 years but moved back can qualify as RNOR and pay zero tax on foreign income for 2–3 more years. Getting this wrong costs lakhs.
Capital gains, NRI, AIS/26AS · NRI Taxation
Residential Status: RNOR / NRI / ROR (Sections 5, 6)
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Provisions
Sec 6(1); Sec 6(1A); Sec 6(3); Sec 5
Analysis
Three categories and what income they pay tax on: ROR (Resident and Ordinarily Resident): Global income, salary earned abroad, rental income from foreign property, dividends from foreign company, ALL taxable in India. RNOR: Only India-sourced income OR income from India business/profession. Foreign salary, foreign rental = NOT taxable. NRI: Only income received or accrued in India (salary for services in India, rental from Indian property, interest in Indian banks, capital gains on Indian assets). The RNOR window, why it matters: A person returning to India after 10+ years abroad qualifies as RNOR for the first 2-3 years. During this period, foreign income (still being received from prior employer, foreign rental, foreign dividends) is NOT taxable in India. Effective grace period to wind down foreign income streams without Indian tax.
Close
- Count days present in India in the current FY (April 1 to March 31)
- If above 182 days → ROR (unless 60-day rule exception applies for NRIs going abroad for work)
- If below 182 days: count days in 4 preceding FYs, if < 365 days → NRI
- If below 182 but above 60 days AND above 365 in 4 FYs → check RNOR eligibility
- RNOR test: Were you NRI in 9 of 10 preceding FYs? OR ≤ 729 days in last 7 FYs?
- Based on status: list which income is taxable in India this year
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