Who is a Resident but Not Ordinarily Resident and what are the tax implications?
New Delhi, May 27 -- When an NRI returns to India permanently, tax residency does not change immediately upon arrival. Instead, the change generally occurs after crossing the 182-day threshold in a financial year, or earlier under the 60-days-plus-365-days rule.
However, residential status alone does not determine the extent of taxation. The RNOR category - Resident but Not Ordinarily Resident - plays a crucial role in deciding whether foreign income becomes taxable in India during the transition phase.
Most returning NRIs are eligible for RNOR status for nearly two to three financial years, depending on their earlier duration of stay in India. Failing to claim this status properly can result in foreign income being unnecessarily subjec...
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