Returning to India: your RNOR status and what happens to your accounts
Updated
Am I resident, RNOR or non-resident for Indian tax?
Under section 6 of the Income-tax Act 2025 you are resident in tax year 2026-27 if you spend 182 days or more in India, or 60 days with 365 in the four years before (for a visitor with Indian income above ₹15 lakh: 120 days). A returning resident is 'not ordinarily resident' (RNOR) if non-resident in 9 of the previous 10 years or in India 729 days or less in the previous seven, and then foreign income is not taxed in India.
Official rule: A resident is 'not ordinarily resident' if non-resident in nine of the ten preceding tax years, or in India 729 days or less in the seven preceding tax years; or a citizen/PIO resident only through the 120-day test (120 to under 182 days); or a deemed resident (s.6(13)). (source, checked 2026-10-21)
Not modelled: the special day counting for crew of ships (section 6(6), "as prescribed"). "Visit" and "person of Indian origin" are taken as you state them. Your tax return decides.
Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.
When do I become a resident of India for tax?
In a tax year in which you are in India 182 days or more (source, checked 2026-10-21), or 60 days or more with 365 days in the four years before (source, checked 2026-10-21). The 60-day test does not apply to a citizen who left that year to work abroad (source, checked 2026-10-21); for a citizen or PIO living abroad and visiting it applies only if Indian income is above ₹15 lakh, and then with 120 days (source, checked 2026-10-21). A citizen not taxed in any other country with Indian income above ₹15 lakh is a deemed resident (source, checked 2026-10-21).
What is RNOR status?
"Not ordinarily resident" (often called RNOR) is a resident who was a non-resident in 9 of the 10 tax years before, or in India 729 days or less in the seven years before — or resident only through the 120-day test, or a deemed resident (source, checked 2026-10-21). As RNOR, income that arises outside India is not taxed in India unless it comes from a business controlled in India or a profession set up in India (section 5(1)(c)) (source, checked 2026-10-21). FCNR(B) interest stays tax-free (source, checked 2026-10-21).
What happens to NRE and FCNR(B) accounts when I return to India?
| Account | On return | Source |
|---|---|---|
| NRE account | Must become a resident account, or the money moves to an RFC account, immediately | (source, checked 2026-10-21) |
| NRO account | May become a resident account | (source, checked 2026-10-21) |
| FCNR(B) deposit | May run to maturity at the contracted rate, then becomes a resident rupee or RFC deposit | (source, checked 2026-10-21) |
| RFC account | Takes NRE and FCNR(B) balances in foreign currency, free to use abroad | (source, checked 2026-10-21) |
| Existing home loan | Continues; repaid from your Indian income once resident | (source, checked 2026-10-21) |
An NRE term deposit moved to RFC on return earns at most the RFC savings rate if it has run less than 1 year, and no premature-withdrawal penalty applies (source, checked 2026-10-21). An FCNR(B) deposit converted early still earns interest, at no more than the RFC savings rate (source, checked 2026-10-21).
Questions people ask
How long does RNOR status last?
As long as one of the tests holds: non-resident in 9 of the previous 10 tax years, or 729 days or less in India in the previous seven. For someone who lived abroad for many years that is usually the first two or three tax years after returning.
Is FCNR interest taxable after I return to India?
Not while you are not ordinarily resident in India: the exemption covers a non-resident or a not-ordinarily-resident person.
Must I close my NRE account when I return?
In India, you must have it designated as a resident account, or move the money to an RFC account, immediately on return for employment or a change of residential status.