What is an RNOR, and How Does It Affect NRIs?

RNOR status is provided to those individuals who have been non-resident in India in 9 out of 10 financial years before the current year, or people who have stayed in the country for 729 or fewer days during the previous 7 years before the current fiscal year. Considering this, an RNOR can enjoy their RNOR status for up to 3 financial years post their return to the country. Additionally, their tax liability is in line with NRIs.

Why Does Residential Status Matter for NRIs?

The residential status matters to NRIs because it provides them with certain tax exemptions, specifically on foreign income, for a limited time after coming back to India. Additionally, it also allows them to claim several tax benefits.

Does the 60-day Rule Apply to All NRIs?

Under the new tax regime, the 60-day rule does not apply to NRIs, Indian citizens working overseas, or crew members. Additionally, the 120-day rule is applicable to NRIs who have high income, i.e., INR 1.5 million in India.

How Often Should NRIs Track Their Stay in India?

NRIs should check their residency status after every visit to India. To do so, they need to calculate the number of days you stayed in the country. In India, the fiscal year begins from 1 April to 31 March in the following year. To consider yourself as an NRI, you need to stay in India for less than 182 days in an accounting year.

What is a Capital Gain Tax Calculator?

The capital gain tax calculator is an online tool that helps you pay the estimated capital gain tax owed on the profits made by selling long-term and short-term capital assets.

Who Can Use this Calculator?

Both Indian residents and non-resident Indians can use this calculator to calculate their capital gain tax liability.

What Inputs are Required to Calculate Capital Gain?

The inputs required are: Identify the user (Indian or NRI). Type of assets. Purchase Date and Price. The sale Date and Price. Transfer expenses (If Any). Applicability of Indexation

Does the Calculator Use Indexation Benefits?

Yes, it does use the indexation benefits for the eligible assets.

Are Tax Rates Different for NRIs and Indians?

Yes, non-resident Indians (NRIs) are subject to a higher TDS rate and have a specific applicability

What are the Basics of LTCG Tax Rates?

The basis of the long-term capital gains tax rates is: Listed equity, which is 10% above INR 1 lakh (no indexation) Property or other assets 20% with indexation. (12.5% Without Indexation) Rates for NRIs depend on the type of assets they hold, which might only include surcharge and cess.

Can NRIs Use this Calculator if they have Sold Property in India?

Yes, NRIs can use this calculator if they have sold property in India.

Does the Calculator Include Surcharge and Cess?

Yes, it does add the applicable health and education cess (4%) as well as the surcharge based on the income slab of the user.

Why should I use Savetaxs Capital Gain Tax Calculator?

You should use Savetaxs capital gain tax calculator because it is two-in-one, which means you do not need to use the LTCG calculator and STCG calculator individually, as this calculator calculates everything in one go , eliminates the hassles of manual calculations and errors, and is high on privacy, which means your data is end-to-end encrypted.

Do I Need to Pay U.S. Taxes After Moving Back to India?

If you are a U.S. citizen, then yes, even after moving back to India, you need to pay U.S. taxes. However, if you are a green cardholder, to stop the U.S. tax regulations, you may need to surrender your green card status to the US tax officials.

Can I Keep My 401(k) After Moving?

Yes, you can keep your 401(k) after moving back to India. However, on your withdrawals, US tax implications may apply. You can avoid so by rolling over or moving your current 401(k) into the plan of the new employer. Also, you can opt for an IRA for moving your funds from a 401(k) to a new place.

An exit tax is imposed on individuals or businesses who renounce their citizenship in a country. It is imposed to prevent taxpayers from avoiding the implied tax by leaving the citizenship before a taxable event happens. An exit tax is generally levied on unrealized gains of individuals and businesses.

When You Leave the U.S., What is Your Indian Tax Status?

If you return in the mid-financial year (August), you are considered resident but not ordinarily resident (RNOR) of India till the start of the next financial year in India. It is an ideal selection to get tax-efficient options.

Can I sell U.S. Stocks Tax-Free After Relocating?

Yes, if you sell your U.S. stocks after relocating to India as an RNOR, then on the sale, you do not need to pay any tax. It particularly stays tax-free if the amount remains in your U.S. accounts.

What Are the Key Items to Finalize Before Moving Back to India?

The key items that you need to finalize before moving back to India are to clarify your customs allowances (for instance, INR 5,00,000 for electronics), set up mail forwarding, and, for tax purposes, wisely time your residency changes.

What Documents Should I Prepare Right After I Arrive in India?

Once you arrive in India, apply for an Aadhaar and a PAN card. Additionally, to get investment options, remittances, and tax filings, open an NRE or NRO bank account.

What Are Safe Investment Moves When Returning to India?

Safe investment moves when returning to India are utilizing tax exemptions like Section 54F of the Income Tax Act, for Indian markets, reallocate your U.S. portfolio, and reinvest into tax-efficient instruments.

How Can I Connect With Others Who Have Moved Back?

To connect with others who have moved back, join online groups and communities like Nextdoor or Facebook groups to find local connections. In addition, you can also use social media platforms to find people with common interests and meet them personally.

Are there any Special Tax Provisions for Returning NRIs With Foreign Retirement Accounts?

Yes, Section 89A of the Income Tax Act is the special provision that allows returning NRIs

How Does the National Pension Scheme (NPS) Offer Tax Advantages?

The NPS (National Pension Scheme) provides several tax benefits. Under Section 80CCD (1), personal contributors are eligible for a deduction of up to 10% of salary, along with an additional INR 50,000 under Section 80CCD (1B). Under Section 80CCD (2), employer contributions of up to 10% of salary as an additional deduction. Also, self-employed individuals are allowed to claim up to 20% of their gross income.

How are Pensions Taxed in India?

Pension taxation in India differs depending on the type. For private sector employees, commuted payments (lump-sum payments) are partially tax-exempt, and for government employees, it is fully exempt. Regular monthly payments or uncommuted payments are subject to full taxation as salary income.

How to Claim the Tax Relief Under Section 89A?

To claim the tax relief under Section 89A, the taxpayer needs to electronically file Form 10-EE prior to submitting their ITR (Income Tax Returns). Filling this form will activate the relief option for the current as well as for the following financial years. Also, once you use this option, it cannot be changed.

What is Rule 21 AAA, and its Relevance?

The Rule 21AAA states that any foreign retirement income will be added to your Indian taxable income in the year it's taxed abroad. This will help prevent India from taxing it on accrual.

What is the Due Date to File Form 10-EE?

The due date for filing Form 10-EE is either 31st July of the respective assessment year or on the due date as per the provisions of Section 139 (1).

What About Foreign Tax Credit (FTC) If I Opt for Section 89A?

If you opt to postpone taxation under Section 89A, the foreign tax credit for foreign taxes that are paid on withdrawal can be claimed only in the year in which you include such income in your return. Any tax that is paid earlier will not be eligible for the FTC.

Which Countries are Covered Under Section 89A?

Currently, under section 89A, the USA, UK, and Canada are covered.

Is Section 89A Tax Relief Automatic for Returning NRIs?

No, section 89A tax relief is not automatic for returning NRIs.

Do I Need to File any Form to Claim this Relief?

Yes, you need to file Form 10EE before submitting your Income Tax return to claim this relief.

NRI Income Tax & Compliance

Section 89A - Tax Relief on Income from Foreign Retirement Funds

By Varun Gupta |Last Updated: January 27, 2026

Section 89A - Tax Relief on Income from Foreign Retirement Funds

Frequently Asked Questions

No matter what your source of income is, we've got you covered. There's a plan for everybody!

Under Section 6 of the Income Tax Act, a person is an NRI if he/she has not stayed in India for 182 or more days during the fiscal year or if he or she lived in India for less than 365 days during the four years before the current financial year and less than 60 days in the current financial year.

According to the Income Tax Act, to become an Indian resident, a person needs to be physically present in the country for 182 or more days during the fiscal year. It is the minimum days that a person needs to stay in India to become a resident there.

Yes, RNOR is different from NRI. RNOR is a contraction for the resident but not ordinary resident, and applies to individuals of Indian origin opting to return to India after living overseas for several years. NRIs who have lived 9 out of 10 years outside India before the current financial year can be stated as RNOR.

Yes, in the course of one year, the residential status of a person can change in India, if he/she stays outside the country for more than 182 days. In India, the tax liability of a person is determined according to the number of days he/she stayed in the country.

If you stayed in India for 182 or more days during a financial year, yes, it can affect your NRI status. However, if you stay in the country for a limited time during your every visit, it will not impact your NRI status. For instance, staying in the country for 100 days during a fiscal year.

Section 89A - Tax Relief on Income from Foreign Retirement Funds

Frequently Asked Questions

What Defines an NRI Under Section 6 of the Income Tax Act?

What is the Minimum Stay Required to Become an Indian Resident?

Is RNOR Different From NRI?

Can Residential Status Change Every Year?

Does Visiting India for a Few Weeks Affect My NRI Status?

Section 89A - Tax Relief on Income from Foreign Retirement Funds

Frequently Asked Questions

What Defines an NRI Under Section 6 of the Income Tax Act?

What is the Minimum Stay Required to Become an Indian Resident?

Is RNOR Different From NRI?

Can Residential Status Change Every Year?

Does Visiting India for a Few Weeks Affect My NRI Status?