Becoming RNOR: the residency math, the 9-out-of-10 test, and how to maximize the window

A returning NRI moved back to India from San Francisco on July 12, 2024. Their final US workday was July 5, 2024. They spent one week visiting family in different US states before flying out. They arrived in Bangalore on July 12, started consulting work for a US client (remote) from July 15, and joined an Indian employer in November 2024. They had visited India 3 times during their 6-year US stint — 12 days in 2019, 8 days in 2021, and 15 days in 2023. They had been a US tax resident from 2018 through July 2024.

What's their Indian residency status for FY 2024-25?

The answer requires running them through two separate tests — Section 6(1) of the Income Tax Act for basic residency, then Section 6(6) for the ROR/RNOR sub-classification. Their physical presence in India during FY 2024-25 = July 12, 2024 to March 31, 2025 = 263 days. That exceeds the 182-day threshold under Section 6(1), so they're a Resident for FY 2024-25.

Then Section 6(6). Were they non-resident in 9 out of the 10 previous FYs (FY 2014-15 through FY 2023-24)? Assuming they were a US tax resident continuously from 2018 onwards (so NRI in India for FY 2018-19 through FY 2023-24 = 6 years), what about FY 2014-15 through FY 2017-18? They likely lived in India during those years (pre-US move), so resident those 4 years. Total NRI years out of last 10: 6. Not 9 or more. Fail the first condition.

Second Section 6(6) condition: were they in India for ≤729 days across the previous 7 FYs (FY 2017-18 through FY 2023-24)? Sum: 12 + 8 + 15 days during US years = 35 days across those years. Assuming they were a full-time India resident in FY 2017-18 (their last pre-US-move year, let's say 250 days), total = 250 + 35 = 285 days. Well under 729 days. Pass the second condition.

Because at least one of the two Section 6(6) conditions is met (the second one), they're classified as RNOR for FY 2024-25.

This is the residency-math walkthrough every returning NRI needs to perform. The answer determines whether you can legitimately shield 1-3 years of foreign-source income from Indian tax under the RNOR rules — material six-figure-rupee savings for most returnees with US assets.

This article is the residency-rules deep dive. The framework lives in the master Returning NRI playbook; this article goes deep into the day-count math, the borderline cases, the 120-day high-income rule that catches Indian citizens with significant India-source income, the deemed-resident provisions under Section 6(1A), and the multi-year planning scenarios.

Section 6(1): the basic residency test

The starting point. Per Section 6(1) of the Income Tax Act 1961, you are an Indian tax resident for a financial year if either of these conditions is true:

Condition	Threshold
Days physically present in India during the FY (April 1 – March 31)	182 days or more
Days physically in India during the FY	60 days or more AND aggregate 365 days or more across the four preceding FYs

The first condition is the most commonly applied. If you spent at least 182 days in India during the financial year, you're a resident — full stop.

The second condition catches frequent visitors. If you've been spending 60+ days per year in India across multiple years (so you have at least 365 cumulative days across the previous 4 FYs), and you spend 60+ days in the current FY, you're a resident.

The 120-day high-income rule. Per Finance Act 2020 amendments, if you're an Indian citizen with total income from Indian sources (excluding foreign income) exceeding Rs 15 lakh in the FY, the 60-day threshold in the second condition shrinks to 120 days. This clawback was added to capture high-earning Indian citizens who would otherwise spend just-under-60 days a year in India and claim non-resident status to avoid Indian tax on their substantial Indian-source income.

For most returning NRIs, the 120-day rule isn't relevant in the year of return because they don't have Rs 15 lakh+ of Indian-source income that year (most income that year is US-source from before the move). But for high earners spending part-years in India during the post-return period, this rule can flip residency status.

Day-count mechanics. Both arrival and departure days count as days in India. If you arrive at IGI Delhi at 11:30 PM and leave the same day at 1:00 AM, both calendar dates count. International travel days that include any time on Indian soil count.

The financial year is April 1 – March 31. Not the calendar year (January – December). Important to keep clear because Schedule FA uses the calendar year for foreign-asset disclosure.

Section 6(6): the RNOR vs ROR sub-classification

If you're a Resident under Section 6(1), Section 6(6) determines whether you're Resident & Ordinarily Resident (ROR) or Resident & Not Ordinarily Resident (RNOR).

Section 6(6): You are RNOR if either of these is true:

Condition	Threshold
Days as non-resident in India across the previous 10 FYs	9 or more years as NRI out of the previous 10
Days physically in India across the previous 7 FYs	729 days or fewer total across those 7 years

You are ROR only if both conditions FAIL — i.e., you've been resident in 2 or more of the previous 10 years AND you've spent more than 729 days in India across the previous 7 years.

Worked-example: the typical returning NRI scenario.

An engineer who moved from India to the US in March 2020 and returned to India in July 2024:

Test for FY 2024-25 (the year of return)	Math	Result
Section 6(1) basic test	Days in India July 2024 – March 2025 = ~263 days > 182	Resident
Section 6(6) Condition 1: NRI in 9 of last 10 FYs (i.e., FY 2014-15 through FY 2023-24)	NRI status FY 2019-20 (mid-March departure), FY 2020-21, FY 2021-22, FY 2022-23, FY 2023-24 = 5 years NRI. (And maybe partial NRI for FY 2019-20 depending on day-count.) Definitely not 9.	Condition fails
Section 6(6) Condition 2: ≤729 days in India across last 7 FYs (FY 2017-18 through FY 2023-24)	India trips during US years: assume 10 days/year × 4 years = 40 days. Plus FY 2017-18 (full India resident pre-move) ~365 days + FY 2018-19 ~365 days = 730 days already from full-resident years alone. Just over 729.	Conditions met — depends on exact day count

If days across the 7-year window were 729 or fewer → RNOR for FY 2024-25. If days exceeded 729 → ROR for FY 2024-25.

Most US-to-India returnees who were in the US for 5+ years pass at least one condition for RNOR status. The 9-of-10 condition is usually the simpler-to-meet one for those who left India relatively young.

The 9-of-10 rule applied year-by-year:

Year of return	Years to count as previous 10	Common pattern
FY 2024-25	FY 2014-15 to FY 2023-24	Most US returnees were NRI for 5-9 of these years; many qualify
FY 2025-26 (Year 2)	FY 2015-16 to FY 2024-25	The Year-of-Return becomes a Resident year in the count — so NRI years drop by 1; still often qualifies
FY 2026-27 (Year 3)	FY 2016-17 to FY 2025-26	NRI years drop by 1 more; may or may not still qualify
FY 2027-28 (Year 4)	FY 2017-18 to FY 2026-27	NRI years drop; many fall out of RNOR by this year
FY 2028-29 (Year 5)	FY 2018-19 to FY 2027-28	Usually fully transitioned to ROR by now for most returnees

The transition to ROR typically happens at Year 3-5 post-return for most returning NRIs, depending on their pre-move history.

Practical day-count tracking

Both Section 6(1) and Section 6(6) require precise day counts. The Income Tax Department can audit residency claims and require evidence.

What counts as proof of physical presence in India:

• Passport stamps (entry + exit dates) — primary evidence
• Boarding passes for international travel — secondary
• Bank statements showing card transactions in India — corroborating
• Lease agreements / utility bills / Aadhaar address linkage — context
• Employment records (Indian employer onboarding date, US employer end-of-employment date)
• Hotel bookings showing physical presence

What does NOT count:

• Email addresses on India domains
• LinkedIn location
• Indian phone number
• Indian bank accounts (you can hold these as NRI without becoming resident)

For most returning NRIs, passport stamps are the gold standard. Keep your passport even after renewal; old passport stamps may be needed for residency-status defense in audit years.

Day-count tools. The Income Tax e-filing portal has a basic days-in-India tracker. For complex cases (multiple international trips, US/Singapore/UAE/Australia legs), use a spreadsheet:

Trip leg	Departure date	Arrival date	Days outside India	Cumulative India days for FY
Jan 5 to Feb 1, 2024 (US business trip)	Jan 5, 2024	Feb 1, 2024	28 days outside	India days = (Apr 1 to Jan 4) + (Feb 2 to Mar 31)
... etc

The Section 6(1A) deemed-resident rule

Under Finance Act 2020 amendments, Indian citizens not liable to tax in any other country due to domicile/residence are deemed to be Indian residents under Section 6(1A) if their total income from Indian sources exceeds Rs 15 lakh.

This rule was added to catch "stateless" high-earning Indian citizens who structured their affairs to claim residency in no specific country and thus pay tax nowhere. For most returning NRIs returning from a country with a clear tax-resident structure (US, UK, Singapore), this rule doesn't apply.

But the rule does apply to certain cases:

• Indian citizens working in Gulf states (UAE, Saudi Arabia, etc.) with no income tax — historically claimed NRI status; now potentially deemed resident under 6(1A)
• Indian citizens in seafaring / extraterritorial work claiming no specific tax residency

For returning NRIs from US/UK/Singapore/Australia/Canada/Europe/Japan — countries with clear residency-based tax systems — Section 6(1A) is unlikely to apply to you.

Important note about Section 6(1A) and RNOR. If Section 6(1A) makes you a deemed resident, you're automatically RNOR (not ROR) under Section 6(1A) — meaning the RNOR foreign-income exemption rules still apply. This is a softer treatment than full ROR taxation.

Multi-year RNOR planning

The RNOR window typically lasts 1-3 financial years for a typical US-to-India returnee. The exact length depends on:

1. Number of NRI years immediately before return
2. Number of NRI years in the 10-year history pre-return
3. Total days in India across the 7-year history pre-return

Scenario A: Long-term US resident returning.

Engineer moved to US March 2017, returned July 2024.

FY	Status	Reason
FY 2024-25	RNOR	Year of return; clearly RNOR
FY 2025-26	RNOR	Still: NRI in 9 of 10 previous years (FY 2015-16 through FY 2024-25 minus the return year and the prior year = 9 NRI years out of 10)
FY 2026-27	RNOR	NRI in 8 of 10 — not 9. But 729-days test still passes (less than 729 days across last 7 FYs). Still RNOR via Condition 2.
FY 2027-28	RNOR or ROR	NRI in 7 of 10 — clearly not 9. 729-days test: if you've been in India 700+ days across FY 2020-21 through FY 2026-27, may already exceed 729. Borderline — depends on exact days.
FY 2028-29	Probably ROR	Past the RNOR window for most

Scenario B: Shorter US stint.

Engineer moved to US March 2021, returned July 2024.

FY	Status
FY 2024-25	RNOR (year of return; meets condition)
FY 2025-26	Likely RNOR via 729-days test (only 3 prior NRI years; probably well under 729 days in 7-year window)
FY 2026-27	Possibly RNOR or transitioning to ROR

Scenario C: Multiple short India visits during US years.

Engineer in US 2017-2024 but visited India 30 days/year × 7 years = 210 days during US stint.

FY 2024-25 (Year of Return)	Status
Days in India FY 2024-25 = 263 (post-return)	Resident
9-of-10 condition: NRI status FY 2017-18 to FY 2023-24 = 7 years NRI. Not 9. Fail.
729-days condition: 30 days/year × 7 years = 210 + assume FY 2017-18 partial-year India residence (say 200 days) = ~410 days. Below 729. Pass.
Status: RNOR

Scenario D: ROR from the year of return (rare).

Engineer spent significant time in India during US years (e.g., 100 days/year × 7 = 700 days). On return: also had been only NRI for 5 of 10 prior years (because they visited India and stayed longer than 60 days in some years).

Section 6(6)	Result
9-of-10 NRI: 5 of 10 = fail
729-days: 700 + Year of Return India days (say 263) ÷ across 7 prior years count = ~700 days. Just under 729. Pass.
Status: RNOR (because at least one condition met)

If the same person had spent 110 days/year in India during US years (770 days total in 7 years), both conditions fail and they'd be ROR from the year of return — no RNOR window at all.

The takeaway: even modest India visits during US years (60+ days/year) can affect RNOR window length. For high-net-worth returnees planning to use the RNOR window aggressively, the multi-year residency calculation should be done before any decisions on departure timing.

The "received in India" test for RNOR foreign income

The RNOR provision exempts foreign income from Indian tax only if the income is earned outside India AND not received in India. The "received in India" test is the most contested aspect of RNOR taxation.

The general principle:

Where income is initially deposited	RNOR treatment
US bank or US brokerage account	Not received in India; RNOR exemption applies
Direct deposit to NRO account in India	Received in India; taxable to RNOR
US bank → wired to NRE account in India (during the same FY)	Generally considered received in India for the wire amount, but the original sale gain treatment is complex
Held in US account during the FY, remitted to India in a subsequent FY	The earning event was outside India; subsequent remittance is generally not a fresh tax event

The practical rule: keep US-generated income in US accounts during RNOR years. Don't auto-remit to India unless needed for India consumption. The longer the gap between earning and remittance, the cleaner the position.

Selling US shares during RNOR. The cleanest sequence:

1. Sell shares in US brokerage (gain stays in US brokerage as USD)
2. Hold USD in US brokerage or US bank for at least 1 full FY after sale
3. Remit gradually to India for India consumption needs (not bulk)

Aggressive variants of this exist but are higher risk on audit.

Documentation and audit defense

If the Income Tax Department audits your residency status (common for returning NRIs with significant foreign income), they'll ask for:

• Complete passport copy (including all stamps) for the relevant FYs
• Boarding passes for major international travel
• US tax returns (Form 1040) for the years you were US resident
• US Form 8854 (if applicable) on expatriation
• Lease/property documents showing where you lived
• Bank statements showing geographic transaction patterns
• Employment records (US employer end-date letter, Indian employer start-date)

Keep all of this for 8 years from the relevant assessment year. Section 132 search cases can re-open up to 6 assessment years; Black Money Act has no time bar.

Common residency-rule errors

1. Counting calendar days instead of FY days. Schedule FA uses calendar year (Jan-Dec). Section 6(1) uses FY (Apr-Mar). Easy mistake; expensive consequence.

2. Not counting arrival/departure days. Both count as days in India for Section 6(1) purposes.

3. Claiming RNOR with insufficient prior-year NRI history. If you'd only been in US for 3-4 years, the 9-of-10 test fails. The 729-days test may still pass; verify carefully.

4. Assuming RNOR exempts you from Schedule FA. RNOR exempts you from tax on foreign-source income (subject to "received in India" test). It does NOT exempt you from Schedule FA disclosure. Black Money Act consequences apply for missing disclosure regardless of RNOR status.

5. Using day-count tools that count only US-leg trips. If you traveled to Singapore for 14 days mid-FY, those 14 days are NOT in India. Multi-country travel needs comprehensive day-count tracking.

6. Filing as Resident (ROR) when actually RNOR. Over-paying tax on income that's actually exempt. Less common than the inverse but equally fixable via revised return.

7. Filing as Resident (RNOR) when actually ROR. Under-disclosing foreign income that's actually taxable. Material exposure; could trigger demand notice + interest.

Next in the series

This article covered the residency-rules deep dive. The other articles in the Returning NRI playbook:

• Moving back to India with US RSUs — the complete playbook — the master overview
• What happens to your 401(k) and IRA when you return to India (in progress) — the retirement account question
• Selling US property as a returning NRI (in progress) — FIRPTA + India tax + repatriation
• RSU vesting during the year of return (in progress) — attribution rule + worked example

Foundational cross-references:

• RSU vesting while in US vs India — the bilateral residency framework
• Schedule FA disclosure guide — the calendar-year disclosure mechanic
• How RSU double-taxation actually works — the structural three-event framework

For diversification decisions during the RNOR window:

Rovia lets you transfer your concentrated US employer shares from Morgan Stanley / Schwab / E*Trade / Fidelity into a diversified portfolio without triggering a sale event (in-kind transfer keeps the original cost basis and the foreign-equity asset bucket intact). For returning NRIs sitting on concentrated single-stock holdings, this is often the highest-value structural decision in the multi-year transition.

The framework in this article reflects Section 6 as amended through Finance Act 2024. Day-count thresholds and the 9-of-10 / 729-days tests are durable provisions — they don't change with each Budget. Specific rates (the Rs 15 lakh threshold for the 120-day high-income rule) update with each Finance Act; verify the current threshold before relying on it for borderline cases.