RNOR stands for Resident but Not Ordinarily Resident. It is a transitional Indian tax status for people who move back to India after years abroad, and it usually lasts two or three Indian tax years. While you hold RNOR status, India taxes your Indian income but leaves most of your foreign income alone. If you are a US citizen or green card holder, the US keeps taxing your worldwide income throughout.
What RNOR status is
Indian tax law sorts every person into one of three groups for each tax year, which runs from April 1 to March 31.
- Non-resident (NR): India taxes only your Indian income.
- Resident but Not Ordinarily Resident (RNOR): You live in India, but India still taxes you much like a non-resident.
- Resident and Ordinarily Resident (ROR): India taxes your income from anywhere in the world, and you must report your foreign assets in your Indian return.
RNOR is the middle step. It gives a returning NRI time to reorganise foreign accounts and investments before India starts taxing worldwide income.
The tests that decide RNOR status
There are two steps. The first asks whether you are a resident of India for the tax year. The second asks whether you are "ordinarily" resident.
Step 1: are you resident this year?
You are resident in India for a tax year if either of these is true:
- You are in India for 182 days or more in that tax year.
- You are in India for 60 days or more in that tax year, and for 365 days or more in the four tax years before it.
The second test has a relaxation for Indian citizens and people of Indian origin who live abroad and come to India on a visit. For them, the 60 days becomes 182 days, or 120 days if their Indian income is above Rs 15 lakh. Whether the year you move back for good counts as a "visit" is a point to confirm with your adviser.
Step 2: are you "not ordinarily resident"?
If you are resident, you are RNOR for that year when either of these is true:
- You were non-resident in India in 9 of the 10 tax years before this one.
- You were in India for 729 days or less in total during the 7 tax years before this one.
If you fail both, you are an ordinary resident (ROR).
How many years RNOR lasts: a worked example
The number of RNOR years depends on the date you land and on how many days you spent in India on earlier visits. Take someone who left India in 2012, has been non-resident ever since, and visited for 30 days in each tax year. The table shows three possible return dates in 2027, with no other India days in that tax year.
| You land in India on | Days in India, tax year 2027-28 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
|---|---|---|---|---|---|
| July 1, 2027 | 275 | RNOR | RNOR | ROR | ROR |
| September 20, 2027 | 194 | RNOR | RNOR | RNOR | ROR |
| October 10, 2027 | 174 | NR | RNOR | RNOR | ROR |
The first two RNOR years come from the "9 of 10 years" test. In the third year of residence you have two resident years behind you, so only the 729-day test can help.
For the July arrival, the seven years before 2029-30 hold 150 days of visits, 275 days in 2027-28 and 365 days in 2028-29. That is 790 days, so RNOR ends after two years.
For the September arrival, the same sum is 150 + 194 + 365 = 709 days. That is under 729, so there is a third RNOR year.
The October arrival is in India for fewer than 182 days in 2027-28 and has only 120 days in the four years before, so that first year is non-resident. Two RNOR years follow. Foreign income stays outside Indian tax from October 2027 to March 2030.
What India taxes while you are RNOR
India taxes an RNOR on:
- Income that arises in India, such as Indian salary, rent from Indian property, interest on Indian bank accounts and gains on Indian assets.
- Income that is first received in India, wherever it was earned.
- Foreign income from a business controlled from India or a profession set up in India.
India does not tax an RNOR on other foreign income that arises and is first received outside India. That covers interest and dividends in a US brokerage account, rent from a US property, gains on selling US shares, and withdrawals from a US retirement account.
The place of first receipt matters. Have foreign income paid into a foreign account first. You can then move the money to India. Bringing in income you have already received abroad is not a second receipt.
An RNOR also does not have to complete the foreign assets schedule in the Indian return, which applies to ordinary residents.
If you are still a US taxpayer
RNOR is an Indian status and changes nothing on the US side. The result depends on what you are for US tax purposes after you move.
US citizens and green card holders
The US taxes its citizens and green card holders on worldwide income wherever they live. You keep filing a US return every year. You also keep reporting foreign accounts on the FBAR once their combined balance goes above $10,000 at any point in the year. Your new Indian resident accounts count.
For you, foreign income is not tax-free during RNOR. Only one country taxes it. US dividends and capital gains are taxed by the US and ignored by India. Your Indian salary and Indian interest are taxed by India first. You then use the foreign tax credit or the foreign earned income exclusion on your US return to limit double tax.
A green card does not lapse for tax purposes because you have moved. You remain a US tax resident until you formally give it up or the US government ends it. Giving it up after holding it for many years can trigger US exit tax rules. Take advice before you decide.
Visa holders who leave the US
If you were on a work visa such as H-1B, your US tax residence normally ends when you leave. After that the US taxes only your US-source income. A non-resident of the US generally pays no US tax on gains from selling US shares, although the US still withholds tax on dividends from US companies.
If India treats you as NR or RNOR for the same period, India does not tax those foreign gains either. This is the main planning opening in the RNOR window. Confirm the exact date your US residence ends before you sell.
What to do before and during the window
- Pick your landing date with the day counts in front of you. Gather your passport stamps and work out your India days for each of the last 10 tax years.
- Tell your Indian banks when you return. Under India's foreign exchange rules, you become a resident from the day you come back to stay, which is separate from your tax status. NRE and NRO accounts have to be redesignated as resident accounts. FCNR deposits can usually run to maturity.
- Keep foreign income flowing into foreign accounts. Do not redirect US dividends, rent or pension payments to an Indian account.
- Decide what to sell or withdraw during the window. This includes appreciated US shares and retirement accounts. Our guide to 401(k) tax after you return to India covers the retirement side.
- Keep up your US filings if you are a US citizen or green card holder. That means the annual return and the FBAR.
Use an RNOR calculator before you book the flight
The tests are easy to state and easy to get wrong by a day. Our free RNOR calculator takes your return date and past India days and shows your status for each tax year. If you hold a green card or assets in both countries, the returning NRI service pairs you with a cross-border professional.
Common questions
Do I need to apply for RNOR status?
No. There is no application or certificate. You work out your status from your days in India and declare it in your Indian tax return for that year.
Is my US salary taxed in India while I am RNOR?
Yes, if you do the work while you are in India. Salary is treated as earned where the work is done, so it is Indian income whoever pays it. Salary for work you did in the US before you moved is foreign income.
Is a 401(k) withdrawal taxed in India during RNOR?
A withdrawal paid into a US account is foreign income, so India does not tax it while you are RNOR. The US taxes it under its normal rules, including the 10% additional tax on most withdrawals before age 59½. See what to do with an old 401(k) before you move.
Playbook Move: Before you fix a return date, list your days in India for each of the last 10 tax years and run two or three candidate dates through the RNOR calculator. Choose the date that gives the longest window you can use. Then write down which foreign assets you will sell or withdraw inside it, and confirm the US tax on each with a professional.
For informational purposes only; not financial, tax, or legal advice. For decisions about your specific situation, consult a qualified cross-border tax professional.