New Delhi, Aug. 12 -- An individual's residential status is the starting point for determining taxability under Indian tax law. For expatriates and non-resident Indians (NRIs) returning to India, the tax system provides a transitional category called Resident but Not Ordinarily Resident (RNOR).

This status can offer returning NRIs a limited window to settle back into India without immediately bringing certain foreign-sourced income and assets into the Indian tax net. However, the benefits apply only if specific conditions are met.

Under Indian tax law, individuals broadly fall into three residential categories:

To qualify for RNOR status, a returnee must satisfy at least one of two statutory tests:

To illustrate, consider Mr X, who sp...