Do I still have to file an Indian return while I am RNOR?
Yes. The transitional status changes what India taxes, not whether you file. The return is where the status is claimed and where the split between income India taxes and income it does not is actually shown. Nothing about the status is self-evident from the outside, so a year in which you file nothing is a year in which the position rests on your own note rather than on a filing. Treat the return as the record of the status: it states the residency conclusion, reports the income India taxes on that footing, and sets the starting point for the year the window closes.
Does my foreign salary have to go on my Indian return?
That depends on the status the year falls into, which is why the status is settled before the return is drafted. The transitional status shelters most foreign income for a limited period, so foreign employment income earned in a sheltered year is treated differently from the same income earned after the window closes. The distinction the return has to make is between income with an Indian source and income without one, and then between sheltered and unsheltered years. Getting the year classified first and the income mapped second is the order that keeps the filing consistent.
Do I have to list my overseas bank accounts while I am RNOR?
Foreign-asset disclosure on an Indian return is tied to the year your status changes, not to whether you think the assets are significant. That is why the year disclosure begins is one of the things worth establishing at the start rather than discovering later. In practice the work is to fix the status for each year, identify the first year in which disclosure applies, and then build a schedule of foreign holdings for that year: accounts, investments, employer plans and anything held jointly. The schedule is easier to assemble while the statements are current than to reconstruct afterwards.
Can I elect RNOR status or is it worked out for me?
It is worked out for you. The status follows from your residency record in the preceding years, so it is decided by history rather than chosen on a return. What that history gives you, though, is predictability: because the test looks backwards, the status for a coming year can be forecast before you move. So the return does not elect anything. It states a conclusion that the day-count record already fixed, which means the record itself is the thing to get right, with travel history evidenced rather than remembered.
What changes on my return once the RNOR window closes?
The scope of what India taxes widens, and the return has to reflect that from the first year of the new footing rather than gradually. Foreign income that the transitional status sheltered comes into charge, and the disclosure of foreign assets applies on the wider basis. This is the year most often filed wrongly, because the previous years' returns are used as a template and the template no longer fits. The practical answer is to prepare the closing year and the first full year together, so the change is made deliberately in one place and documented.
Do foreign capital gains count while the transitional status lasts?
The status shelters most foreign income for a limited period, and the year in which a gain is realised is therefore what decides how India treats it. That is why realising foreign gains is one of the decisions worth timing against the window rather than against the market alone. For the return, what matters is the date of the disposal against the year the status covers, the evidence of the cost and the proceeds, and whether the gain is also taxed in the country where the asset was held, which is a treaty question in its own right.
What is RNOR status?
Resident but not ordinarily resident — a transitional category in India between non-residence and full residence, reached on the day counts after returning from a period abroad. While it lasts, certain foreign income stays outside the Indian tax base, which makes the timing of a return to India worth planning rather than leaving to chance. It is temporary, and the window is set by the day-count rules. See RNOR status.
How does the treaty tie-breaker work when both countries say I am resident?
As a sequence, stopping at the first test that gives an answer: where you have a permanent home available; if in both or neither, where your centre of vital interests is; then habitual abode; then nationality; and if all of those tie, the two tax authorities decide by agreement. It is evidential rather than elective — you do not choose your treaty residence, you demonstrate it, which makes the record of homes, family and time the substance of the claim. See tie-breaking dual residency.
