Now Reading: RNOR status offers NRIs tax relief on foreign income after return
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RNOR status offers NRIs tax relief on foreign income after return
RNOR status offers NRIs tax relief on foreign income after return
NRIs returning to India can claim Resident but Not Ordinarily Resident (RNOR) status to defer tax on foreign income for up to three years. livemint.com explains that to qualify, returnees must have…
The Story in Brief
NRIs returning to India can claim Resident but Not Ordinarily Resident (RNOR) status to defer tax on foreign income for up to three years. livemint.com explains that to qualify, returnees must have been non-resident for 9 of the previous 10 years or spent 729 days or fewer in India over the preceding 7 years. During the RNOR window, foreign earnings such as dividends, rent, and capital gains are exempt from Indian tax, while local income remains taxable. However, depositing foreign income directly into an Indian account makes it taxable. Once full residency begins, failing to report foreign assets via Schedule FA can attract a penalty of up to Rs 10 lakh per year under the Black Money Act.
The Indian Opinion
The RNOR provision is often portrayed as a giveaway to wealthy NRIs, but local income remains fully taxable and the window is temporary. Many returnees may overlook strict travel day calculations or accidentally deposit foreign earnings into Indian accounts, losing the shield. Critics also forget that offshore business controlled from India remains taxable. The real test will be whether the tax department enforces the Rs 10 lakh penalty for non-compliance uniformly.
Source: livemint.com
This story was synthesised by AI from the source linked above.
