After years of sailing the world, many senior captains and marine engineers decide to return to India permanently. Transitioning from NRI to Resident Indian doesn’t have to mean an immediate heavy tax hit.
The Section 6(6) RNOR Status
Under Section 6(6) of the Income-tax Act, an individual qualifies as Resident but Not Ordinarily Resident (RNOR) if:
- They have been an NRI in at least 9 out of the 10 preceding financial years; OR
- Their stay in India across the 7 preceding financial years does not exceed 729 days.
Benefits of RNOR Status
During your 2 to 3-year RNOR transitional period:
- Foreign investment dividends and overseas pensions remain 100% tax-free in India.
- Interest earned on foreign currency deposits in Resident Foreign Currency (RFC) accounts is completely exempt.
- Only income earned, accrued, or received within India is subject to tax.