Home |Tax returns filing | I was working in Dubai till 2015 and was a non-resident Indian (NRI) till that year. I returned to India in March 2015 and had less than 182 days in India for every year in the past 10 years or more. Since 2015, I have been living in India. Clarify me how many years of Resident but Not Ordinarily resident (RNOR) status are accorded to me upon return to India, and whether the tax is payable on the interest income earned?

I was working in Dubai till 2015 and was a non-resident Indian (NRI) till that year. I returned to India in March 2015 and had less than 182 days in India for every year in the past 10 years or more. Since 2015, I have been living in India. Clarify me how many years of Resident but Not Ordinarily resident (RNOR) status are accorded to me upon return to India, and whether the tax is payable on the interest income earned?

Hima
Answered on February 10,2020

You have returned to India from Dubai in March 2015, prior to which you have been a resident of Dubai for 10 years and more. Therefore, for FY2014-15 and earlier years, your status would be of a non-resident in India for the purpose of Income-tax Act, 1961, of India. From FY2015-16, you have been living in India. However, your status is likely to be that of a resident not ordinarily resident (RNOR) for the years FY2015-16 and FY2016-17, as you qualify as a non-resident of India for 9 out of 10 years immediately preceding the years under consideration, that is, FY2015-16 and FY2016-17.

The possibility of you qualifying as an RNOR for FY2017-18 is remote. However, taxability of your income has been analysed under both scenarios, that is, as a resident as well as an RNOR.

As an RNOR: Interest income earned from deposits maintained in an FCNR account (Foreign Currency Non-Repatriable account) and an NRE account (Non-Resident External account) is exempt from tax up to such period you are a non-resident or RNOR in India.

As a resident: Interest income from deposits maintained in an FCNR account and an NRE account would be taxable in India from the year you qualify as a resident of India.

Related Questions