422. OCI returning to India,

will I have to pay tax in India

on my USA income

Questions: Hello Mr. VKChand After sixteen years in the United States we have decided to return to India. My question is will my foreign income be taxed by the Indian government. We are all US citizens and have taken OCI so we don’t need visa. What about income tax on any income from within India? Please provide a nontechnical answer. I checked Indian tax site and find it confusing. Many people say worldwide income is taxed in India. Answer: For foreign nationals returning to India, such as OCI holders, there is a transition period where their foreign income is NOT taxed in India. To clarify, an ordinary resident in India for taxation purposes is classified as ROR. There is another classification that is known as RNOR. The RNOR category stands for Resident but not Ordinarily Resident. The main difference between ROR and RNOR is that while ROR is liable to pay taxes on their global income, RNOR is liable to pay tax only on their Indian income and their foreign income is exempt from taxes in India. OCI holders who return to India are considered to have RNOR status if: 1. They have been a non-resident in India in nine out of the ten previous years preceding that year, OR 2. Have during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less. Only one of the conditions mentioned above needs to be satisfied to claim RNOR status and not pay taxes on your foreign income. To summarize, when a OCI holder returns to India, they will have RNOR status if they have been out of India for 9 out of last 10 years or if they have spent less than 729 days in India in the last 7 years. OCI holders taxation of Indian income OCI holders who have income in India will be taxed in India, whether or not they stay in India for 182 days or not. For example, if an OCI holder goes to India for three months and earns income in India, this income would be liable to taxes even though the person has stayed in India for only three months. On the other hand if an OCI holder spends an entire year in India, does not earn any income in India, then they may have no tax liability in India.