Around 12,700 Indian technology professionals had moved from the US back to India by September 2026, according to data from the staffing firm Xpheno that The American Bazaar reported on 19 October 2026, citing The Economic Times. Many bring home US brokerage accounts, retirement savings or property interests, and sooner or later they take those holdings to a CA or wealth advisor. For most of them, the answer starts with RNOR status, the resident but not ordinarily resident category in Indian tax law.
RNOR status is a window rather than a permanent shelter. While it lasts, most income a client's US assets earn abroad stays outside Indian tax, and the assets stay off the foreign asset schedule. Both change in the year the client becomes ordinarily resident. Meanwhile, fresh money the client sends to the US from India runs through the Liberalised Remittance Scheme and attracts tax collected at source from the first year back, as our guide to TCS on foreign remittance explains.
What RNOR status means under the new Act
The Income-tax Act, 2025, in force from 1 April 2026, keeps the familiar categories of residence. Section 6 of the Act makes an individual resident if they spend 182 days or more in India in a tax year, or 60 days in the year along with 365 days across the four years before it.
Section 6(13) treats a resident individual as not ordinarily resident if either of two tests is met. The first is that the person was non-resident in nine of the ten tax years before the current one. The second is that the person spent 729 days or less in India across the seven tax years before it. The Income Tax Department's FAQs for non-residents confirm that these look-back tests reach into years governed by the Income-tax Act, 1961, so earlier years abroad count in full.
How long RNOR status lasts for a returning client
A client who lived abroad for a decade or more usually qualifies once they become resident. Each full year in India adds about 365 days to the seven-year look-back, so the 729-day test is normally used up within two or three tax years, and the nine-in-ten test fails once the client has two resident years in the previous ten. A client who returned in October 2026 might be non-resident or RNOR for tax year 2026-27, depending on days, and is often RNOR for one or two years after that.
The window can close earlier than clients expect, because long holidays in India during the years abroad count towards the 729 days. Only a day-by-day count from passport stamps and travel records will settle the position, which is why the first job is a written residence map prepared with the client's CA.
What happens to US assets a returning client already holds
On exchange control, the position is settled. The RBI explained in A.P. (DIR Series) Circular No. 37 of 19 October 2011 that, under section 6(4) of FEMA, a person resident in India may continue to hold, own, transfer or invest in foreign currency, foreign securities and property abroad if these were acquired while the person was resident outside India. A returning client need not sell US shares or bring home a US bank balance simply because they have moved back.
On the Indian tax side, section 5 of the Act taxes a resident on income from all sources, but for a person who is not ordinarily resident, income that accrues outside India is included only when it comes from a business controlled in India or a profession set up in India. In practice, dividends, interest and gains from a client's US portfolio that arise and are received outside India generally fall outside Indian tax during the RNOR years. Income received in India is treated differently.
The US side runs on its own timetable. A client who is no longer a US tax resident is taxed in the US only on US-source income, and US tax withheld on a dividend is reported on Form 1042-S, the annual statement a US payer issues to a foreign recipient. A green card is the exception. According to the IRS, a green card holder stays a US tax resident until the status is given up in writing to US Citizenship and Immigration Services, or ended by that agency or a federal court. A client who kept the card may still be taxed in the US on worldwide income, which a US tax adviser should review first.
New money sent to the US runs through LRS and TCS
The RNOR label changes nothing for fresh remittances. A person who returns to take up a job or to settle becomes resident under FEMA, which looks at intention rather than days, so new money sent from India to the US falls within the LRS limit of USD 250,000 per person per financial year, as set out in the RBI's LRS FAQs. Under section 394 of the Income-tax Act, 2025, a remittance for any purpose other than education or medical treatment attracts TCS of 20 per cent on the amount above ₹10 lakh in a tax year.
For example, a client who remits ₹40 lakh from India in tax year 2026-27 to invest in US property, with no other remittances that year, would have TCS of 20 per cent collected on the ₹30 lakh above the threshold, which comes to ₹6 lakh. The TCS can be claimed as a credit in the return, but the cash is held up until then. Money already sitting in a US account can be invested there without an LRS remittance or TCS, while money moved from India carries both.
When the client becomes ordinarily resident
When the RNOR years end, foreign income becomes taxable in India in full, and US tax withheld on it can be claimed as a foreign tax credit by filing Form 44 under Rule 76 of the Income-tax Rules, 2026, within twelve months from the end of the tax year where the return was filed on time. According to a July 2026 Economic Times report, non-residents and RNOR individuals are not required to report foreign assets in Schedule FA, but a move to ordinarily resident status brings in reporting of all specified foreign assets, including those bought while the client lived abroad. Clients who carry gaps from earlier resident years will recognise the questions in our note on the three foreign asset gaps advisors will find before FAST-DS 2026 closes.
What advisors should do in the first year back
The RNOR years work best when the advisor treats them as a planning period with a fixed end date. The steps below follow in order, because each depends on the one before it.
- Build a residence map with the client's CA and record the first tax year in which the client will be ordinarily resident.
- List every US account and asset with its purchase date, to show what was acquired while the client lived abroad.
- Confirm whether the client still holds a green card, and bring in a US tax adviser if so.
- Check that US income is not received in India first during the RNOR years.
- Decide whether any new US investment comes from money already abroad or from LRS remittances that attract TCS.
- Prepare Schedule FA details and Form 44 papers a year before the client becomes ordinarily resident.
None of this lowers investment risk. A client in private US real estate can lose capital, may be unable to sell for years, and is exposed to falling property values, tenants leaving, distributions not being paid, borrowing at the property level, currency movements and too much money in one place. Tax planning changes when and where tax is paid. It does not change those risks.
For clients who want US property exposure, our explainer on US commercial real estate investment for advisors sets out how private deals work. On Raveum, eligible clients invest in diversified US commercial real estate, including net lease, self-storage and multifamily property, with each deal reviewed by Raveum and held in its own legal entity. Offshore investors invest through a US corporation that holds the property interest, and typically receive Form 1042-S. Advisors who introduce eligible clients through Raveum's partner page will find that the RNOR timeline decides when that form first matters in an Indian return.
The professionals who came home this year are moving between two tax systems as well as two cities. For most, the RNOR years are the only quiet stretch before both systems start asking questions. An advisor who maps the dates, sorts the assets and plans remittances against TCS during that stretch leaves the client ready for the first full return rather than surprised by it. Our guide to TCS on foreign remittance covers how that tax applies once the planning is done.
Frequently asked questions
What is RNOR status in income tax?
RNOR status means a person is resident in India but not ordinarily resident. Under section 6(13) of the Income-tax Act, 2025, an individual qualifies by being non-resident in nine of the previous ten tax years, or by spending 729 days or less in India across the previous seven. Indian income is taxed, but most foreign income is not.
How long does RNOR status last after returning to India?
There is no fixed period. RNOR status lasts as long as either look-back test is met, which for a client who lived abroad for many years is often the first resident year and one or two years after it. Frequent long visits to India while living abroad can shorten it, so a day-by-day count is needed.
Is US income taxable in India for an RNOR?
Generally not, if it arises and is received outside India. Section 5 of the Income-tax Act, 2025 includes foreign income of a not ordinarily resident person only when it comes from a business controlled in India or a profession set up in India. Income received in India is taxable, and US tax may still be withheld.
Does an RNOR need to report foreign assets in Schedule FA?
According to a July 2026 Economic Times report, non-residents and RNOR individuals are not required to report foreign assets in Schedule FA. The requirement starts in the first year the client is resident and ordinarily resident, and it then covers all specified foreign assets, including those acquired while the client lived abroad.
Can a returning NRI keep US investments after moving back to India?
Yes. Under section 6(4) of FEMA, as the RBI explained in a 2011 circular, a person resident in India may keep foreign currency, securities and property abroad that were acquired while resident outside India. New money sent from India must follow the Liberalised Remittance Scheme and attracts TCS above the ₹10 lakh threshold.
What risks should a returning client weigh before investing in US real estate?
Private US real estate can fall in value, and capital can be lost. Such investments are usually illiquid for years, tenants can leave, distributions may not be paid, borrowing adds risk, and rupee movements change what the client receives at home. Tax status changes when tax is paid, not these risks, so suitability needs its own review.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
