Key takeaway
When you return to live in India, you become a resident under FEMA from your return and must redesignate NRE and NRO accounts; foreign currency can move to a Resident Foreign Currency (RFC) account. Assets you acquired abroad while non-resident can generally be kept. For income tax, you may be “resident but not ordinarily resident” for a period, keeping most foreign income outside Indian tax — but once you become ordinarily resident, worldwide income is taxed and foreign assets must be disclosed.
FEMA: what changes
- Bank accounts: inform banks; NRE and NRO accounts are redesignated as resident accounts, or NRE/FCNR funds moved to an RFC account. FCNR(B) deposits may continue to maturity.
- Foreign assets: under section 6(4) of FEMA, a resident may hold, own, transfer or invest in foreign currency, securities or property acquired when non-resident, or inherited from a non-resident.
- Investments in India: update residential status with fund houses, brokers and insurers.
Income tax: RNOR window
A returning individual is “not ordinarily resident” if, among other conditions, they were non-resident in nine of the previous ten years or in India for 729 days or less in the previous seven years. As an RNOR, foreign income is generally not taxed in India unless received in India or derived from a business controlled from India. This can last up to two or three tax years. See residential status for tax.
Once ordinarily resident
- Worldwide income is taxable in India, with treaty relief for foreign tax.
- Foreign assets and income must be disclosed in the Indian return.
- Non-disclosure can attract serious consequences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Planning checklist
- Map your foreign accounts, investments, pensions and property.
- Take advice on timing of sales of foreign assets relative to your RNOR period.
- Update banks and investment providers in India.
- Check the tax and exit rules of the country you are leaving.
- For OCI cardholders returning to live in India, check visa and registration requirements.
Related guides
- All NRI legal guides
- NRI tax and FEMA in India: the complete guide
- NRE vs NRO accounts
- FEMA and RBI compliance (service)
References
- Foreign Exchange Management Act, 1999, sections 2(v) and 6(4); FEM (Deposit) Regulations, 2016 — RBI
- Income-tax Act, 2025, section 6
- Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
