19 June, 2025 at 4:40 pm
A person who qualifies as a resident but doesn't fulfill the criteria for an ordinary resident comes under the RNOR status. Basically, it applies to people who are returning to India after a long time or those who have recently moved to India.
<p><span>Here are some of the common RNOR status mistakes: you have miscounted your duration of stay, which should be 729 days in seven years and the 9/10 years NRI status, to not understanding the income sources, you have mistakes in your documentation, like travel records, bank statements, NRE to RFC account conversion, and tax residency certificates.</span></p> <p> </p>
<p><span>Here are the given points to know the situation in which an individual can be said as an RNOR (Resident but Non-Ordinarily Resident): if an individual is an Indian citizen, or of Indian origin and has income more than 15 lakhs, and stayed in India for more than 120 days but less than 182 days in the previous year, and if a individual is confirms to be a resident of India, then he will be considered as Resident and Not Orinarily Resident. </span></p> <p> </p>
An individual can maintain the RNOR status for up to three fiscal years after coming back to India, based on their previous NRI tenure and by fulfilling specific eligibility criteria.
As per tax perspective, the RNOR status is quite crucial for the NRIs returning from abroad. This status helps them to reorganize their financial arrangements from overseas, and this period can serve as a transition phase for them.
One thing that people often misunderstand is that you don't need to apply for an RNOR status; you will be automatically qualified for it provided that you fulfill the stay and residential requirements. The key condition that needs to be fulfilled is that, firstly, you need to be an NRI Indian for 9 out of the previous 10 financial years, and secondly, your total stay in India must not exceed 729 days during the past 7 financial years.
I went through this recently when I moved back from the USA. The RNOR status was a lifesaver for me because I was still getting some income from the USA in the form of rent and dividends, because of the assets that I own in the USA. I was so relieved to know that I don't have to pay taxes on the income that I am getting from this because I have the RNOR status.
RNOR (Resident but not ordinarily Resident) status is basically a chance using which a person can get tax benefits that a regular resident can't have.
I have the RNOR status, and one key benefit of having this status as compared to ordinary residents is that I have to pay taxes only on the income that I earn or acquire in India. Unlike ordinary resident who needs to pay taxes on their global income as well. Any foreign income that I earn is not subject to Indian tax, which is very beneficial for me.
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