Resident status

Resident status - RNOR

Dear Sir,
My status is NRI . I left India in Feb 2007 and will be finally returning to India in Oct 2015 . During all these years my stay in India in each FY was approx 80 days . I want to know am I eligible to qualify for status of Resident but Not Ordinary Resident (RNOR) from tax point of view . I understand that RNOR status entitles a person for exemption from tax on income on foreign funds like NRE FDs etc. for immediate next two FYs . Kindly clarify.

Thanks
Dr.Dinesh Saksena

Asked 9 years ago in Income Tax

The moment your stay in India crosses 729 days continuously then you become resident.

Vijay N. Kale

CA, Hyderabad

248 Answers

13 Consultations

Talk to Vijay N. Kale

In my earlier answer, I have explained to you in no unambiguous terms about your status - whether 'resident' or 'resident but not ordinarily resident' or 'non-resident'.

This status has nothing to do with claiming your exemption of interest on NRE Account interest. For claiming interest exemption from NRE accounts, you need to be non resident from FEMA perspective.

As per FEMA when you come to India for taking up employment, for carrying on a business or vocation or for any other purpose, in such circumstances as would indicate your intention to stay in India for an uncertain period. (This is only relevant part of definition and not a complete definition), you will be considered as Resident. If you are not decided whether you want to go back or not, you need not inform bank to change your status. However, this must be corroborated with the facts. e.g.once you take up employment in India, your chance to call yourself as non resident may be lost.

Once you are resident as per FEMA, your bank accounts needs to be converted in to ordinary account or Resident Foreign Currency Account by informing the bankers accordingly. There is no other formality.

Interest on Resident Foreign currency Account will be exempt from tax till you are R and OR as per Income Tax Act. Hope this clarifies the matter.

CA Sagar Jayawant

+91 9821153533

3rd Sept. 2015.