A Complete Guide for NRIs Returning to India in 2026

NRIs who are moving back to India often lack clarity about how they can manage their overseas holdings like stocks, ETFs, retirement accounts, RSUs, and foreign property after moving back.

This article covers the Indian tax and reporting rules that apply to returning NRIs, the RNOR window and how to use it, and your FEMA and banking obligations.

For country specific information and the rules that apply at your departure (exit taxes, retirement account treatment, tax clearance), read your country-specific guide below.

Table of contents

• What happens to my stocks when I move back to India?
• What happens to my foreign retirement accounts?
• What happens to my RSUs and stock options?
• What happens to my foreign property?
• Will I have to pay an exit tax when I leave?
• Country Specific Guides
• When do I become an Indian tax resident?
• What is RNOR status and how does it affect me?
• What happens to my bank accounts when I move back?
• Tax and reporting implications of moving back to India
• Common questions
• About Paasa

What happens to my stocks when I move back to India?

Under Indian FEMA regulations, you are legally allowed to indefinitely hold any foreign stocks or ETFs you acquired while living abroad. You do not have to sell them just because you moved.

However, your foreign broker might not let you keep the account. Some platforms (especially retail fintechs) do not support non-resident accounts at all and will either restrict your account to sell-only or force you to close it when you update your address.

Others (like Interactive Brokers) let you convert to an international account, but typically come with restrictions on new funds, high fees, poor FX rates, and the full burden of Indian tax reporting on you.

The best way to stay invested globally is to transfer your investments to a platform specifically built for global investing from India.

You do not need to sell your stocks just because your foreign broker is restricting you. Selling triggers an actual taxable event. Instead, use an in-kind transfer (ACATS in the US, AON in Canada, equivalent mechanisms elsewhere).

This moves your portfolio "as is" to an India-friendly platform like Paasa, preserving your cost basis, holding periods, and compounding.

Note: Your capital gains from foreign stocks and ETFs become taxable in India once you are a full Resident Ordinarily Resident (ROR). Consider resetting your cost basis while you are still abroad or during your RNOR window to reduce your eventual Indian tax liability. Read our guide on how returning NRIs should structure their equity.

What happens to my foreign retirement accounts?

You can usually keep your foreign retirement account after moving to India. The account stays with your provider and continues to grow. But the tax treatment changes significantly, and the specifics depend heavily on the country and account type.

A few rules apply across the board:

• You cannot make new contributions, since most retirement accounts require local earned income.
• India does not recognise foreign tax wrappers. Accounts that are tax-free locally (ISA, TFSA, Roth IRA) are not tax-free in India once you are ROR.
• Most DTAAs give the country of residence primary taxing rights on regular pension payments, with a foreign tax credit available in the other country.
• The RNOR window is the most tax-efficient time to draw down large balances, since withdrawals received in your foreign bank account are not taxable in India.

For the exact mechanics of your 401(k), IRA, ISA, SIPP, RRSP, TFSA, CPP, Superannuation, CPF, SRS, or German pension, read the country-specific guide linked above.

Note: If you hold US-domiciled assets like US stocks, US-domiciled ETFs, or a 401(k), you are exposed to the US Estate Tax. The exemption for non-residents is just $60,000, and any excess is taxed at up to 40%. The standard defence is to hold your long-term US equity exposure through Ireland-domiciled UCITS ETFs rather than US-domiciled ones. Read our detailed US Estate Tax guide.

What happens to my RSUs and stock options?

Most equity plans forfeit unvested units when you leave the company, so if you are leaving your employer to return to India, you will typically walk away from them. Check your equity plan documents before you confirm your resignation date.

For RSUs that vest after you have returned to India, the vesting income is apportioned between your former country and India based on the workdays you spent in each during the full vesting period.

The foreign-source portion is taxed abroad at its applicable rate. The India-source portion is taxed in India as salary income, regardless of your RNOR status.

Example

You had a 4-year RSU grant. You spent 3 years working abroad and returned to India 1 year before the RSUs fully vested. At vesting, the shares are worth Rs. 40 lakhs.

The Rs. 30 lakhs attributable to your foreign workdays is foreign-source income and is not taxable in India during your RNOR period. The Rs. 10 lakhs attributable to your India workdays is taxable as salary income at your applicable slab rate.

Note: Keep a workday log from the grant date of every RSU through to vesting. Your employer's payroll team should track this, but the apportionment is legally your responsibility to verify. Read our detailed guide on RSU vesting during the RNOR period.

What happens to my foreign property?

You can continue holding foreign real estate after moving back. Two ongoing obligations apply: rental income and eventual sale.

Rental income is taxable in the source country even for non-residents. Most countries default to flat withholding on gross rent (US 30%, Canada 25%, Australia 32.5%), but almost all of them let you elect to pay on net income instead, which is significantly more tax-efficient.

India's treatment depends on your residency status:

• During RNOR: Rental income is tax-free in India, provided it is received in your foreign bank account first. If it is wired directly to an Indian account, it becomes taxable in India immediately.
• After becoming ROR: India taxes the rental income at your slab rate. Under most DTAAs, the source country retains primary taxing rights, and India gives you a foreign tax credit for the foreign tax already paid.

For sale of property, every country has some form of withholding mechanism on non-resident sellers (FIRPTA 15% in the US, FRCGW 15% in Australia, Certificate of Compliance in Canada, Spekulationsfrist in Germany). India's treatment:

• During RNOR: The gain is exempt in India. Only the source country taxes the sale. This is the most efficient window to sell.
• After becoming ROR: India taxes the gain at 12.5% LTCG without indexation (for property held over 24 months, under post-2024 budget rules). India gives a foreign tax credit for the foreign tax paid. If foreign tax exceeds India's 12.5% LTCG, no additional Indian tax is owed in practice.

For the country-specific withholding mechanics and DTAA interactions, read your country guide. For more information about how India taxes foreign rental income, read our guide on foreign rental income for RNORs.

Will I have to pay an exit tax when I leave?

It depends on the country:

• Canada, Germany, Australia: Have exit tax regimes that can trigger tax on unrealised gains at departure.
• US, UK, Singapore, UAE: No general exit tax on investments. The US has a separate expatriation tax for covered expatriates who renounce citizenship or long-held green card status, but that is a different situation from returning on a work visa.

If you are leaving a country with an exit tax and have significant unrealised gains, the timing and structuring of your departure matters a lot. Moving before you hit a residency threshold, staying below a holding threshold, or electing to defer can meaningfully change the outcome. Read your country guide for the specifics.

Country Specific Guides

• Returning from the US
• Returning from the UK
• Returning from Canada
• Returning from Germany
• Returning from Australia
• Returning from Singapore
• Returning from the UAE

When do I become an Indian tax resident?

Under the Income Tax Act, you are considered a tax resident of India if:

• You are physically present in India for 182 days or more in the financial year (the 182-day rule), or
• You are physically present in India for 60 days or more in the financial year AND have been in India for 365 days or more in the preceding 4 financial years (the 60-day rule).

Once you meet either criterion, you are legally required to pay tax in India on income earned anywhere in the world, including foreign interest, dividends, and capital gains.

Depending on your travel history in your year of return, you can end up classified as a tax resident of both your host country and India in the same year.

When this happens, the DTAA tiebreaker rules decide which country has primary taxing rights.

Read our detailed guide on India's Double Taxation Avoidance Agreements to see how this works.

For the full breakdown of Indian tax residency rules, read our guide on Resident vs RNOR vs Non-Resident.

What is RNOR status and how does it affect me?

RNOR (Resident but Not Ordinarily Resident) is a transitional tax residency status for returning NRIs.

It sits between Non-Resident and full Ordinary Resident, and gives you a 1 to 3-year window where your global income is treated differently from that of a standard Indian resident.

You qualify for this status if you meet any one of the following criteria:

• You have been an NRI for 9 out of the last 10 financial years.
• You have lived in India for 729 days or less in the preceding 7 financial years.
• You are an Indian Citizen or Person of Indian Origin (PIO) with Indian income exceeding ₹15 Lakhs, and you stay in India for 120 to 181 days (instead of the usual 182).
• You are an Indian Citizen with Indian income exceeding ₹15 Lakhs and you are not liable to tax in any other country. You are then automatically treated as a "Deemed Resident" in India, and Deemed Residents are always classified as RNORs.

What benefits can I get from this status?

As long as you hold RNOR status, your foreign income is not taxable in India, provided it is received outside India first.

• Foreign stocks and ETFs: Capital gains from selling them are tax-free in India. You can also use this window to sell and repurchase to reset your cost basis tax-free.
• Foreign bank interest and dividends: Tax-free in India.
• Retirement account withdrawals: Not taxed by India during this period. For accounts that are taxable at withdrawal (401(k), RRSP, bAV, SRS), this is often the single most valuable RNOR benefit.
• Foreign rental income: Tax-free in India, provided the tenant pays into your foreign bank account.
• Foreign property sales: Capital gains are exempt in India.

To use these exemptions, you must receive the funds in your foreign bank account first.

Do I need to file Schedule FA as an RNOR?

No. RNORs are not required to fill Schedule FA in their ITR, and Schedule FSI does not apply either. The Black Money Act, which penalises Ordinary Residents for not disclosing foreign assets, does not cover RNORs.

The moment you become an Ordinary Resident, Schedule FA becomes mandatory. You will need to list every foreign asset you hold, including assets that generated zero income during the year. Read our guide on foreign asset disclosure requirements for RNOR.

What happens to my bank accounts when I move back?

Your tax residency under the Income Tax Act and your residency under FEMA change on different timelines, and the FEMA switch is what affects your bank accounts.

You become a resident under FEMA immediately upon landing in India if your intention is to stay for an uncertain period or for employment or business. Unlike tax residency (which counts days), FEMA residency applies the moment you return to settle.

Your NRO and NRE accounts must be converted.

Once you are a resident under FEMA, you are legally required to inform your bank and convert your NRO and NRE accounts to a standard Resident Savings Account or an RFC account. Continuing to hold an NRO or NRE account as a resident is a FEMA violation.

You can open a RFC account.

The Resident Foreign Currency (RFC) account lets you hold your foreign currency earnings in foreign currency form, without mandatory conversion to INR. For returning NRIs who expect ongoing foreign income streams (rent, pensions, dividends, retirement withdrawals), this avoids repeated FX conversion and preserves your hedge against rupee depreciation.

Your foreign bank accounts can stay open.

Section 6(4) of FEMA allows you to continue holding and operating foreign bank accounts, stocks, and properties if they were acquired when you were a resident outside India. You are not legally required to close them. Keeping your foreign bank account is often the most important step to preserve your RNOR tax exemptions on foreign income.

Tax and reporting implications of moving back to India

When you permanently return to India, your tax status eventually shifts from Non-Resident Indian (NRI) to Resident. This brings two major changes: your global income becomes taxable in India, and your reporting requirements increase significantly.

To learn more about how your global income is taxed in India and the reporting requirements, read:

• How Global Stocks and ETFs Are Taxed for Indian Investors
• Tax on Repatriation of Foreign Income to India
• Foreign Asset Disclosure (Schedule FA) Requirements for Indians
• How to Claim Foreign Tax Credit Using Form 67

Common questions

Can I send money from India and buy more foreign stocks?

Yes. You can remit up to $250,000 per financial year under the Liberalised Remittance Scheme (LRS) to invest in foreign stocks or ETFs. Transfers exceeding ₹10 Lakhs in a year attract 20% TCS, which you can claim back as a refund or adjust against your tax liability when filing your return.

Do I have to sell my foreign stocks when I move back?

No. Under Section 6(4) of FEMA, you are legally allowed to hold foreign shares and assets indefinitely if you acquired them while you were a non-resident. If your foreign broker does not support non-resident accounts, execute an in-kind transfer to a globally compliant Indian platform rather than selling and triggering a tax event.

Can I keep my foreign bank account after moving back?

Yes. Keeping a foreign bank account lets you receive foreign income directly offshore, preserving its tax-free status under RNOR. If the same income lands directly in an Indian bank account, it becomes taxable in India immediately, even during RNOR.

Should I close my foreign retirement account before moving?

Usually, no. Early withdrawal triggers punitive tax and penalty charges in most countries. It is almost always more efficient to leave the account invested and draw from it in retirement, or during your RNOR window if you are eligible. Read your country guide for the specifics.

How does RNOR status help returning NRIs?

If you qualify as RNOR, your foreign income (dividends, interest, capital gains, rent, retirement withdrawals) is tax-free in India, provided you receive it in your foreign bank account first. This gives you a 1 to 3-year window to rebalance your portfolio, reset cost basis, draw down retirement accounts, or sell foreign property without paying Indian tax.

About Paasa

Paasa is a global investing platform built for Indian residents and returning NRIs. If you are moving back to India, Paasa helps you carry your foreign portfolio across without triggering a tax event, use your RNOR window to reset your cost basis, and stay compliant with Indian reporting rules.

• Hold and trade globally through your RNOR period: Access 10+ exchanges including the US, UK, Germany, Singapore, and Hong Kong, all from a single account held in your name at Interactive Brokers.
• Seamless in-kind transfers: Move your existing portfolio from your foreign brokerage to Paasa without triggering a taxable event, so you stay invested through the transition.
• Cost basis reset during your RNOR window: Paasa helps you identify the right time to sell and repurchase to reset your cost basis before you become an Ordinary Resident, potentially saving you lakhs in future capital gains tax.
• Estate tax protection: Access to Ireland-domiciled (UCITS) ETFs, legally shielding your long-term investments from the 40% US Estate Tax that applies to non-residents holding US-domiciled assets.