Moving back to India: RNOR day count and 90-day checklist

When you move back to India for good, you usually become resident for tax in the year you land, but for the first two or three tax years you are likely to be "resident but not ordinarily resident" (RNOR). In those years India taxes your Indian income and anything first received in India, but not income that arises and is received abroad. How many RNOR years you get depends on your days in India over the previous seven years, so the visits you made while living abroad count.

The money moves follow from that status. An NRE account has to become a resident or RFC account, an FCNR(B) deposit can run to maturity if the bank agrees, and a 401(k), IRA or UK pension can stay where it is, with an option to be taxed in India only when you withdraw. The worked example below counts the RNOR years for someone returning from the US in July 2026, and the checklist at the end splits the jobs into before you move, the first 90 days and the first tax year.

Will you be resident, RNOR or non-resident in the year you return?

India decides residential status for each tax year, 1 April to 31 March, by counting days. The Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026 and calls the financial year a "tax year", kept the long-standing tests in its section 6:

• Resident: in India for 182 days or more in the year, or for 60 days or more in the year and 365 days or more over the four years before it.
• The visit rule: for an Indian citizen or a person of Indian origin who comes to India on a visit, the 60 days becomes 182, or 120 if income from Indian sources is above ₹15 lakh, and someone resident only through that 120-day test is RNOR. Someone moving back for good is usually not on a visit, so plan on the 60-day test applying from the year you return.
• Deemed resident: a citizen whose Indian income is above ₹15 lakh and who is not liable to tax in any other country, as can happen in the UAE, is treated as resident, but as RNOR.

Being resident is not the whole answer. You are "not ordinarily resident" in a tax year if either of these holds:

• you were non-resident in nine of the ten tax years before it, or
• you were in India for 729 days or fewer in all over the seven tax years before it.

Meet either test and you are RNOR. Meet neither and you are resident and ordinarily resident (ROR), taxed in India on your worldwide income.

Worked example: how many RNOR years does Arjun get?

Arjun, an Indian citizen, moved to the US for a job in 2014 and has been non-resident every year since, visiting family for about two weeks a year. He lands in Bengaluru on 1 July 2026 to take up a job and stays; that is his only time in India in FY 2026-27.

So his foreign income stays outside Indian tax until 31 March 2029, and from 1 April 2029 his worldwide income is taxed in India.

The visits decide the third year. At three weeks a year instead of two, his days over FY 2021-22 to FY 2027-28 come to 745 (5 × 21 + 274 + 366), above 729, so FY 2028-29 would already be an ROR year and he would have one RNOR year fewer. Count your own days year by year from passport stamps or travel records before relying on a third year; with a total this close, how arrival and departure days are counted can decide it.

What RNOR status changes for your foreign income

As RNOR you are taxed in India on income that arises in India, and on income first received in India wherever it arises. Income that arises abroad and is received abroad is not taxed in India, unless it comes from a business controlled in India or a profession set up in India. During Arjun's RNOR years:

• His Indian salary, Indian interest and gains on Indian investments are taxed as for any resident.
• Interest on his US bank account, dividends and gains in his US brokerage account and growth in his 401(k) are not taxed in India, as long as they are received abroad.
• Moving his own savings from those accounts to India later is not income in itself. What matters is where the income was first received.

The trap is foreign income paid straight into an Indian account: income first received in India is taxable even in an RNOR year. RNOR status also removes only Indian tax. A US citizen or green-card holder stays taxable in the US on worldwide income wherever they live, and other countries tax some of their own income paid to non-residents, such as rent from a flat you keep there.

What happens to NRE, NRO and FCNR(B) accounts when you return?

Interest on foreign currency deposits with an Indian bank, such as FCNR(B) and RFC deposits, was tax-free for RNORs under the 1961 Act (section 10(15)(iv)(fa)). The 2025 Act moved the exemptions into schedules, so confirm the current treatment with a tax adviser before relying on it, and expect the interest to be taxable once you are ROR.

Your accounts abroad can stay open. Section 6(4) of FEMA lets a person resident in India keep, use and invest foreign currency, foreign securities and property abroad that were acquired while living outside India, along with the income on them. What changes is tax and reporting, covered next.

How India taxes a 401(k), IRA, UK pension or ISA after you return

While you are RNOR, growth inside a foreign retirement account is foreign income received abroad, so India does not tax it. Once you are ROR, India taxes worldwide income, which raises a mismatch: income building up inside the account could be taxed in India every year while the other country taxes it only when you withdraw.

Section 158 of the Income-tax Act, 2025 (section 89A of the 1961 Act) closes that gap for retirement benefit accounts in notified countries: the US, the UK and Canada, with the income tax department's Form 40 FAQs also listing Australia. If you opened the account while resident in that country and non-resident in India, you can choose to have India tax the income in the year you withdraw it, as the other country does. You choose by filing Form 40 (it replaced Form 10-EE) by the return due date; the choice covers all your retirement accounts in that country and the years that follow, and cannot be reversed for the year.

What it does not cover:

• Countries that are not notified, such as Singapore or the UAE.
• Savings wrappers that are not retirement accounts. A UK ISA or a Canadian TFSA is tax-free only at home; India has no matching exemption, so once you are ROR, expect their interest and dividends to be taxed in India as they arise, and gains when you sell, like any foreign income.
• The other country's tax on withdrawals, and any early-withdrawal penalty. How much ends up taxed twice depends on the tax treaty and on the foreign tax credit, claimed on Form 44 (which replaced Form 67), so have a withdrawal worked out before you make it.

Reporting foreign assets once you are ROR

RNOR and non-resident years carry no duty to list foreign assets in your return. From your first ROR year, every foreign bank account, share, fund, retirement account, insurance policy and property goes into Schedule FA each year, for the calendar year ending in that tax year, which means filing ITR-2 or ITR-3. Leaving out a foreign asset can cost a ₹10 lakh penalty under the Black Money Act, 2015; since 1 October 2024 that penalty does not apply where foreign assets other than property total ₹20 lakh or less. Foreign income goes in the return too, and the foreign tax credit needs Form 44 within 12 months of the end of the tax year.

If you were ROR in an earlier year, for example after an earlier spell back in India, and missed Schedule FA, the one-time Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 takes online declarations until 31 December 2026. For an asset bought while non-resident or out of income already taxed, worth up to ₹5 crore, the fee is ₹1 lakh.

Where to keep money in the first years back

There is no single right split; it turns on which currency you will spend in and when. The trade-offs:

• Money you will spend in rupees sits in resident savings accounts and deposits, or rupee investments. Its interest and gains are Indian income, taxed in RNOR years too.
• Money you may need abroad again, for a child's education or a possible move, can stay in that currency: in your accounts abroad, whose income stays outside Indian tax during RNOR years, or in an RFC account in India.
• FCNR(B) deposits already running can be left to maturity if the contracted rate beats what you would get now, provided the bank agrees.
• New money sent abroad as a resident goes through the RBI's Liberalised Remittance Scheme, up to US$2,50,000 a financial year, with 20% TCS on amounts above ₹10 lakh a year sent for investment, credited against your tax. Money you already held abroad from your years there falls under section 6(4) instead.
• Currency risk runs both ways. Spending in rupees from dollar savings means the exchange rate moves your budget; holding foreign currency you will never spend abroad adds a risk you may not want.

Keep enough in rupees for health costs in the first years. A new Indian health policy usually excludes illness in its first 30 days, accidents aside, and can exclude pre-existing conditions for up to three years, the most IRDAI has allowed since 1 April 2024; a policy held abroad does not carry its waiting periods over. The insurance planning guide sizes the cover.

Checklist: before you move, the first 90 days and the first tax year

Before you move

• Count your days in India for each of the last seven tax years, and pick your landing date with the RNOR tests in mind.
• List every foreign account and asset with its value and the date you opened or bought it: you will need it for Schedule FA and to show what you held while non-resident.
• Ask each Indian bank how it will handle your NRE balance and deposits, and whether your FCNR(B) deposits can run to maturity.
• Get the position in the country you are leaving checked: any exit tax, how it taxes retirement withdrawals for a non-resident, and which accounts its providers will let you keep once you live in India.
• Line up health cover in India from the day you land.

The first 90 days

• Tell every Indian bank you are back: NRE to resident or RFC, NRO to resident, FCNR(B) to run to maturity or close.
• Open an RFC account if you want to hold foreign currency in India.
• Update your residential status with each fund house, your broker and depository participant, and your insurers; holdings bought as a non-resident move to resident accounts.
• Keep income from foreign accounts paid into those accounts, not into India, during your RNOR years.
• Keep a record of your arrival date and later travel for the day counts.

The first tax year back

• Work out your status for the year (non-resident, RNOR or ROR), and again each year until you are ROR.
• File a return that shows that status; as RNOR, include Indian income and income received in India.
• Pay advance tax if the year's tax after TDS will be ₹10,000 or more; salary TDS does not cover rent, interest or gains.
• In your first ROR year, add Schedule FA, your foreign income, Form 44 for foreign tax credit and, if you want section 158 for a retirement account, Form 40 by the due date.

Working out your own RNOR years, or what to do with an FCNR(B) deposit or a 401(k)? Ask for a call from a SEBI-registered investment adviser.

This is general information, not personalised tax or investment advice. Tax and FEMA rules change; the figures here apply to FY 2026-27. Dhi is not a SEBI-registered investment adviser.