RNOR year 1-2
Foreign income largely outside Indian tax. Schedule FA is not required while you are RNOR; review it from the first ROR year.
Return to India · Compliance
Returned NRI Compliance Guide — The First Three Resident Years
Schedule FA, Form 67, DTAA layering, FA disclosure cadence and the audit-proofing rituals that keep a returnee out of trouble through ordinary residency.
Schedule FA, Form 67, DTAA layering, FA disclosure cadence and the audit-proofing rituals that keep a returnee out of trouble through ordinary residency.
Last reviewed: June 2026 · Updated for AY 2026-27
Why this matters
The stakes, plainly.
Returned NRIs are a known scrutiny segment. Schedule FA omissions are prosecutable under the Black Money Act at penalties up to 300% of asset value.
Common situations
Where this usually comes up.
First ordinarily-resident year
Global income comes inside the net. Form 67 + DTAA credit machinery activates.
Year 3 onward
Steady-state compliance: ITR, FA disclosure, audit-proofing cadence.
What goes wrong
Expensive mistakes we keep cleaning up.
Schedule FA gaps
Missing accounts, undeclared retirement wrappers, off-balance trusts.
Form 67 timing misses
DTAA credit denied if Form 67 is filed late or misaligned with the foreign tax year.
Carrying NRI assumptions into resident year
Foreign income treated as outside the net when it isn't.
What we cover
The engagement, in writing.
- 01Annual filing calendar across all your foreign and Indian assets
- 02Schedule FA workpaper maintained year-on-year
- 03Form 67 and DTAA credit machinery setup
- 04Audit response readiness — backup pack ready before any notice
- 05Estate, will and succession refresh once fully resident
In depth
What changes year by year
In the year you return, residential status depends on day counts, and most long-term NRIs are RNOR for the first two to three years. During RNOR, foreign-source income stays outside Indian tax unless it comes from a business controlled or profession set up in India, but Indian income — including interest on resident accounts — is fully taxable.
Getting the foreign tax credit right
Once foreign income is taxable in India, credit for foreign tax is claimed through Form 67, supported by proof of tax paid abroad. Credit is computed income by income and country by country, and cannot exceed the Indian tax on that income. Where the foreign tax year differs from India's April–March year, the credit is worked out for the Indian year using the foreign tax attributable to it.
Habits that keep you out of trouble
Keep one foreign-asset register, updated each December, listing every account, policy, retirement plan and property with peak and closing values. Reconcile AIS before filing each return. Keep evidence of foreign tax paid and the exchange rates used. Review account designations and demat KYC every year until your status settles. Most notices to returnees come from inconsistency between years, not from complicated transactions.
Common questions
Answered, candidly.
- When does Schedule FA start?
- From the first financial year you are an Indian tax resident, including RNOR years.
- What if I miss a foreign account in Schedule FA?
- Black Money Act penalties up to 300% of asset value. Voluntary disclosure under Section 139(5) is the safer path.
- Can I claim DTAA credit on US tax paid?
- Yes, via Form 67 filed before the ITR. Treaty article and tax-year alignment matters.
Authored authority
The frameworks on this page are drawn from NRI Tax Blueprint 2025 — written by Regi Tom Antony, FCA, the practicing CA who advises on the same problems every week.
On the record
What clients say after the plan ships.
“Regi mapped out the RNOR window before I moved and saved us nearly two years of needless India tax on our US brokerage. The plan was written, dated, and exactly what I needed.”
Recovered USD 38k in pre-empted tax via RNOR sequencing.
Figures reflect aggregate RTA & Associates client engagements, 1997–2025; individual outcomes vary.
Anand R.
Tech founder, returning from California
USA → India
“We sold our Bengaluru flat from Dubai. The Section 197 lower-deduction certificate alone freed up ₹42 lakh of working capital while the sale closed. No other CA we spoke to even raised it.”
TDS reduced from 14.95% to 4.1% via Form 13.
Figures reflect aggregate RTA & Associates client engagements, 1997–2025; individual outcomes vary.
Farah K.
Investment banker, Dubai
UAE → India
“Clear, direct, on the record. Regi told us what would and wouldn't work — and exactly what the next filing was. No upsell, no fog.”
Priya & Mahesh S.
Doctors, NHS, planning return
UK → India
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