New RNOR Calculator by Ambhi

[Kumar]

As per below RNOR guidelines, cumulative stay in India of immediate previous 7 years to be considered and it has to be 729 days or less. Though this is done in Ambhi?s calculator, number of days outside India in current Financial year is deducted (in step-3) from 7 year cumulative days. Is this correct ? Shouldn?t the days outside India during current FY be used (deducted) in next financial year ? Thank you.

02 Such a resident will be treated as R but NOR if:-
i. his residential status is Non-Resident in 9 out of 10 immediately preceding financial years.
OR
ii. his stay does not exceed 729 days in immediately preceding 7 years

Dear Ambhi,
1. Firstly I congratulate you for the initiative and efforts of preparing the calculator for determining residential status under Income Tax Act, 1961 [I.T. Act] .
.02 Now, a returnee Non-Resident Indian's (NRI) residential status is determined as Non-Resident ; Resident but Not Ordinarily Resident (R but NOR) and Resident and Ordinarily Resident (R & OR) based on the number of stay in India in the current year viewed together with stay in India in preceding 4 years, 7 years and 10 years respectively.
2. A returning NRI's residential status is determined as under:-
.01 In the year of return for permanent settlement his residential status will be determined as resident if :-
i. his stay in India exceeds 181 days in the year of return.
OR
ii. his stay exceeds 59 days in the year of return coupled with stay exceeding 364 days in immediately preceding 4 financial years.
.02 Such a resident will be treated as R but NOR if:-
i. his residential status is Non-Resident in 9 out of 10 immediately preceding financial years.
OR
ii. his stay does not exceed 729 days in immediately preceding 7 years.
.03 If a resident does not fulfill either of the above 2 conditions of 10 years and 7 years respectively, he will be treated as R & OR.
3. Now the calculator that you have prepared seems to take into account the stay of last 7 years only but does not verify the residential status of preceding 10 years.
4. It would, therefore, be necessary to modify the calculator so as to examine the residential status of preceding 10 years.
5. In case of you need any help, it will be a pleasure to provide the same.

Best wishes
RAJESH H DHRUVA

[Kumar]

Thank you Rajesh. I see the errors that you pointed out; Updated one below.

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{FY Apr-Mar} {Days in India}
2015-------------365
2014-------------357
2013-------------298
2012-------------0
2011-------------36
2010-------------0
2009-------------21
2008-------------30
2007-------------0
2006-------------35

R2I in June-2013.
For FY2013: previous 7 years (FY2006 to FY2012) stay in India is 122days (35+30+21+36), hence RNOR
For FY2014: previous 7 years (FY2007 to FY2013) stay in India is 385days (30+21+36+298), hence RNOR
For FY2015: previous 7 years (FY2008 to FY2014) stay in India is 742days (30+21+36+298+357), hence ROR. To avail RNOR for this year, stay another 12 days outside by March-2015, not by March-2016 correct ?

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One last question on #7 below. How did you arrive at 14 days ? Might have included 729th as well, that is 742-728 ? May be one day less but to be on safer side I will have additional day or two outside India.

7. If you stay out of India in year 2014 - 15 for 14 days or more you will continue to be R But NOR even in 2015 - 16.

[RAJESH H DHRUVA]

Dear Kumar

1. I have suggested 14 days instead of 12 days as the day of arrival and departure are included in the total stay as a full day each.

2. Often its is found that international arrivals and departures are in proximity of mid night.

3. An arrival at 2345 hours and departure at 0015 hours measuring 15 minutes of late night arrival and 15 minutes early morning departure will add to one day each adding two days to total stay in India.

4. So its fair to add two days to the minimum stay not totaling to 59 days or 181 days in India respectively in case of an Indian citizen resident leaving India to take up employment or a resident on an overseas visit or an NRI visiting India.

Best wishes

RAJESH H DHRUVA
femaonline.com

[PS2blr]

Dear experts. I am a US citizen and have lived in the US for the past 14 years. I am now in India since a year. I have also not spent more than 750 days in India in the past 7 years. So I should be able to file taxes in a RNOR status. However, my tax filer (who I just don't trust now) tells me that my employer in the US was an "India based" company (I work for one of the big 5 consulting and system integration firms) so I can't really use the RNOR status. Is he right? Please advice. Thanks much.

[RAJESH H DHRUVA]

Dear PS2blr

1. The tax filer is incorrect.

2. An Indian Company cannot operate in USA unless it has a Subsidiary or Joint Venture in USA.

3. Ask him to give you copy of Section of the Income Tax Act or Tax Circular or Judgement he is relying on.

Best wishes

RAJESH H DHRUVA
femaonline.com

[SushantSingh]

Would some honorable member explain to me my tax status as per the the information given below. I was working outside the country since the last 15 years. I spent in excess of 185 days outside the country in every financial year since 2004, thus qualifying me as a non resident for every year all the way upto March 2016.


After 15 years of service I lost my job, on my return to India for leave, so return to India date is in the month of March (18th March 2016). With whatever little understanding I have about laws governing taxation from this useful forum, I understand that I am a RNOR for the financial year 2016-2017, since I am an NRI for 9 out of 10 years preceeding my return to India.

However, could somebody please shed light on what my status would be for the FY (2017-2018). Will I be classified as resident and be liable to pay taxes starting for FY 2017-2018 or will I come under the ambit of tax only from FY 2018-2019. For how many years can I draw the benefit of being RNOR ? after my return to India.


Several tax websites like cleartax and hrblock are ambiguous about how long the RNOR status is available for the returning NRI, some say max upto 3 years, some say 2 years, depending on date of return. Any senior member who has been in a similar situation here who can shed more light I will be very grateful.