RNOR-Resident but not Ordinarily Resident : –
RNOR stands for Resident but Not Ordinarily Resident(i.e. full form of RNOR). Section 6(6) of the Income Tax Act 1961 deals with the conditions to determine the status of Residence. These conditions are defined as under: –
- If he/she has been a non-resident in India for nine out of ten previous years preceding the relevant financial year
OR
- If he/she has during the 7 previous years preceding the relevant financial year been in India for 729 days or less.
Scope of Total Income for RNOR: –
Section 5 of the Income Tax Act 1961 deals with the taxability of the total income by whatever source derived by RNOR as under: –
- Income received or deemed to be received in India during the financial year.
- Income accrues or arises in India, whether directly or indirectly, during the financial year.
- Income deemed to accrue or arise in India, whether directly or indirectly, during the financial year.
Please refer to determine the taxability of income in the hands of RNOR, summarized as under in the following table.
| S.No. | Particulars of Income | Whether taxable or not |
| 1 | Income received or deemed to be received in India whether earned in India or elsewhere. | Taxable |
| 2 | Income accrues or arises or is deemed to accrue or arise in India during the previous year, whether received in India or elsewhere. | Taxable |
| 3 | Income accrues or arise outside India and received outside India from a business controlled from India | Taxable |
| 4 | Income accrues or arise outside India and received outside India in the previous year from any other source. | Not Taxable |
| 5 | Income accrues or arises outside India and received outside India during the years preceding the year and remitted to India during the previous year. | Not Taxable |
Conclusion:-
As per Sections 5 & 9 of the Income Tax Act 1961, any income that accrues or arises, or is deemed to accrue or arise in India shall be chargable to tax tax in India that a person receives or is deemed to receive in India.
Please note when a person gains control of money for the first time, it will be considered the receipt of income. If the money is then sent or transferred elsewhere, it does not count as a separate receipt under this definition.
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FAQs for RNOR Taxation:-
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Is Income from a business or profession carried out in India taxable in the hands of RNOR?
Section 9 of the income tax Act 1961 deals with the taxability of any income generated from business/profession carried out in India by an RNOR. These incomes shall include income from a sole proprietorship, partnership, or any other form of business entity.
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Is Income from salary or wages received for services rendered in India taxable in the hands of RNOR?
Section 9 of the income tax Act 1961 deals with income earned for services rendered in India. This could include income earned by way of salary /wages received in India by an RNOR. It would be taxable as income earned by working in India as an employee, director, or consultant.
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Do RNOR need to pay taxes on Income received from rent of property situated in India:-
As per Section 9 of the Income Tax Act, any income earned by way of rent received from property situated in India is taxable in the hands of an RNOR. This could include income earned from renting out a residential or commercial property located in India.
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Is Income from capital gains arising from the transfer of a capital asset situated in India taxable in the hands of RNOR?
As per Section 9 of the Income Tax Act, any income generated from the transfer of asset situated in India shall be chargeable to tax in the hands of an RNOR. This could include income earned from the sale of stocks, real estate, or any other capital asset located in India.
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Do RNORs need to pay taxes on income received from royalties for the use of intellectual property rights in India?
Section 9 of the Income Tax Act deals with any income earned by way of interest received on savings bank accounts or fixed deposits held in India. It would be taxable in the hands of an RNOR.
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Do RNORs need to pay taxes on income received from dividend in India?
Section 9 of the Income Tax Act deals with taxability of income earned from dividends declared by domestic companies.
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Do RNORs need to pay taxes on income received from royalties for the use of intellectual property rights in India?
As per section 9 of the Income Tax Act, any income earned by RNOR from royalties received for the use of intellectual property rights in India is taxable in the hands of an RNOR.
