Determining India Tax Residency After Return: NRI, RNOR, and ROR

(INDIA) If you returned to India this year and want a clear answer on tax residency, start with a simple, two-part test from the Income Tax Act, 1961, as kept in place by the Income Tax Bill 2025. Your tax residency depends only on your physical stay in India during the financial year (April 1 to March 31). This determines your resident status, your tax rate, and whether foreign income is taxable here.

Below is a straightforward eligibility guide to help you decide where you stand and what to do next during an NRI → resident transition.

Quick Qualification Check: Are you a Resident This Year?

You are a tax resident for the year if you meet either of these conditions:

• You stayed in India for 182 days or more during the financial year, or
• You stayed in India for at least 60 days during the financial year and 365 days or more in the four years just before this year.

If you do not meet either condition, you remain a Non-Resident Indian (NRI) for tax purposes for the year.

• Yes, you’re a Resident: You met 182 days, or 60 + 365 days.
• No, you’re not a Resident: You didn’t meet either rule; you’re an NRI for tax this year.

Note: The law checks this every year. Your status can change year to year based on days of presence.

Transitional Category: Do You Qualify as RNOR?

If you returned after years abroad, you may not become a full resident immediately. You may qualify as a Resident but Not Ordinarily Resident (RNOR) for 1–2 years after your return. RNOR is a bridge category that softens your shift into full residency.

To qualify as RNOR, both of the following must hold:

1. You already qualify as a Resident this year (based on the tests above, i.e., 182 days or 60+365), and
2. One of the following is true:
   • You were a non-resident for at least 9 out of the 10 years just before this year, or
   • Your total stay in India in the 7 years just before this year is 729 days or less.

If you do not meet these RNOR conditions, but you do meet resident conditions, your status is Resident and Ordinarily Resident (ROR).

What Each Status Means for Your Income

• NRI: Only income earned or received in India is taxable in India.
• RNOR: Taxed on Indian income and income from a business controlled in India. Foreign income earned and received outside India stays outside Indian tax during the RNOR window.
• ROR: Global income is taxable in India — foreign salary, dividends, interest, capital gains, etc.

According to analysis by VisaVerge.com, many returnees qualify as RNOR for at least one year after moving back, which helps manage foreign assets and payouts during the transition without immediate global tax in India.

Disqualifying Factors to Watch

You will not qualify as Resident if:

• You stayed in India for fewer than 182 days and also failed the 60 + 365 test.
• Your travel records and passport entries do not support the days claimed.

You will not qualify as RNOR if:

• You are Resident this year but you were a non-resident for fewer than 9 of the past 10 years, and
• Your total stay in India over the last 7 years is more than 729 days.

You will not qualify as ROR if:

• You meet Resident conditions but also meet RNOR conditions — in that case you’re RNOR, not ROR.

Practical Steps to Lock In the Right Status

1. Track your stay:
   • Keep careful count of days in India for each financial year.
   • Use passport stamps, boarding passes, and travel logs.
   • Note: Count actual days in India; even part-days of presence matter.
2. Check the tests in order:
   • First, decide if you’re Resident (182 days or 60+365).
   • If Resident, test for RNOR (9/10 years non-resident, or ≤729 days in past 7 years).
   • If not RNOR, you are ROR.
3. Adjust plans if needed:
   • If you prefer to remain NRI for one more year, plan travel to keep days below the thresholds.
   • If you need RNOR to protect foreign income for a short period, plan your return to meet Resident tests and also satisfy an RNOR condition.
4. File tax returns based on status:
   • NRI: Disclose Indian-sourced income (rent, interest from NRO, Indian salary).
   • RNOR: Disclose Indian income and any income from a business controlled in India; foreign income earned and kept abroad is not taxable during RNOR.
   • ROR: Disclose global income.
5. Plan around Indian income over ₹15 lakh:
   • If you have high Indian income, some special rules and exceptions apply for residency tests. Time your stay and earnings carefully to avoid unwanted status changes.
6. Seek professional help:
   • If you hold foreign shares, RSUs, overseas pensions, or trusts, consult a tax professional experienced in cross-border reporting.

For official guidance, see the Income Tax Department’s help page on residential status: Income Tax Department – Residential Status.

Real-Life Scenarios

• Returning professional:
  • You moved back in July and spent 210 days in India this year. You’re a Resident. You were NRI for 9 of the last 10 years. You’re RNOR this year. Your U.S. salary earned and kept abroad before your return is not taxed in India during the RNOR year.
• Frequent traveler:
  • You spent 75 days in India this year, and your total for the past four years is 380 days. You’re a Resident based on the 60+365 rule. If your past non-resident history meets 9/10 years or ≤729 days in 7 years, you’re RNOR; otherwise, you’re ROR.
• Short visit returnee:
  • You came for 50 days this year. You fail both tests. You remain NRI for this year; only Indian-sourced income is taxable in India.

NRI → Resident Transition: How to Improve Your Position

• If you want RNOR:
  • Plan your return so you meet the Resident test this year.
  • Keep your past India presence low enough to meet RNOR (non-resident in 9/10 years, or ≤729 days in 7 years).
  • If you’re close to thresholds, delay long stays until next year.
• If you want to stay NRI a bit longer:
  • Keep this year’s days under both Resident tests. Be careful near year-end travel; a few extra days can tip you into Resident.
• If you’re moving to ROR soon:
  • Review foreign investments, interest, and salary.
  • Consider closing foreign payroll and settling foreign earnings before the RNOR period ends so you don’t bring new foreign income into ROR taxation.

Evidence and Record-Keeping That Help

• Maintain a day-wise travel calendar with entry/exit stamps.
• Keep copies of tickets and boarding passes.
• Retain past tax returns that show NRI status.
• Save overseas payslips and bank statements if you’ll claim RNOR and exclude foreign income.

Good records protect you during assessments and help you switch status correctly each year.

Tax Scope by Status: Clear Guide

This framework is effective under the Income Tax Bill 2025, which keeps the core residency tests and provides clarifications for returning Indians. VisaVerge.com reports that this continuity helps people plan moves with fewer surprises in the first year back.

Common Pitfalls That Can Cost You

• Counting calendar months instead of actual days in India.
• Ignoring the 60 + 365 rule because you think “182 days or nothing.”
• Missing RNOR even though you’re eligible, then over-reporting foreign income.
• Letting Indian income cross ₹15 lakh without planning your stay, which may affect residency tests.
• Filing late or with the wrong status because you assumed last year’s status repeats automatically.

If You’re Not Eligible for RNOR This Year

• If Resident and fail RNOR, stay compliant as ROR:
  • Report global income.
  • Review foreign tax credits in your resident country to reduce double tax if applicable.
• If you prefer to become RNOR next year:
  • Plan days to meet Resident tests next year while keeping prior-year presence low enough to satisfy the 9/10 or ≤729-day RNOR conditions.
• If you remain NRI:
  • Keep Indian income disclosures clean. Consider timing Indian receipts (rent, term deposit interest) to manage your tax bill.

Action Checklist Before You File

• Confirm your days and decide status: NRI, RNOR, or ROR.
• Map income sources to tax scope for your status.
• For RNOR, verify your 9/10 years or 729-day test with documents.
• For ROR, list all foreign earnings and accounts for full reporting.
• Seek advice if you have overseas equity grants, pensions, or trusts.

Your tax residency is a yearly, rules-based result. By tracking days, confirming RNOR early, and aligning income timing with your resident status, you can handle the NRI → resident transition smoothly and lawfully while avoiding tax on foreign income during the RNOR bridge period.