Resident but Not Ordinarily Resident (RNOR) is a specific tax residency status defined under Indian Income Tax law. A person is considered RNOR if they qualify as a resident in India during a financial year but do not meet the criteria to be classified as an ordinary resident. This typically applies to individuals who have recently moved to India or have stayed abroad for long periods.
To be an RNOR, an individual must satisfy one of these conditions: they have been a resident in India for fewer than 2 out of the last 7 years, or they have stayed in India for fewer than 730 days in the last 7 years. This status is important because it affects how their global income is taxed in India.
For RNOR individuals, only income earned or received in India or income derived from a business controlled or a profession set up in India is taxable in India. Income earned outside India is generally not taxable, unlike for ordinary residents. This distinction can provide tax planning advantages for people transitioning between countries.
Understanding RNOR status is crucial for compliance with income tax filings and helps in accurate tax liability assessment. It is especially relevant for expatriates, returning NRIs (Non-Resident Indians), and new residents to India.
For more detailed guidance on income tax residency and related compliance, you can visit https://services.fintax24.in/5-income-tax. This resource offers professional support tailored to individual and business tax needs.