RNOR Transition Planner
Year-by-year 401k/IRA withdrawal timing for high-income Indians returning from the US, UK and Canada
Year-by-year planner · 401k/IRA timing
Client-side only — nothing leaves your browser. Day counts are for the Indian FY (1 Apr – 31 Mar).
How the RNOR window works
RNOR taxed only on Indian-source income AND income received/accrued in India. Foreign income (including 401k distributions, IRA withdrawals, foreign pension) is NOT taxable during RNOR years.
Typically 2-3 years for returning NRIs, depending on days count. RNOR in Year 1 if 9-of-10 test met; then likely Resident from Year 3+.
FAQs
How many RNOR years do I get?
Depends on your days count. If you were NRI for all of the last 10 FYs, Year 1 of return = RNOR (9-of-10 test met). Year 2 may still be RNOR. Year 3 onwards typically Resident. Exact count depends on actual days.
Is my 401k distribution taxed in India?
During RNOR: No — foreign income is out of scope. Once Resident: Yes, unless you elect s.89A deferral to match withdrawal year.
What is s.89A?
Section 89A lets an India-resident declare foreign retirement account income (401k/IRA/RRSP) in the year of actual withdrawal rather than accrual — matching the US tax year. Elected once; not available to NRIs or RNORs.
Should I withdraw 401k before or after returning?
Before return (NRI): US 30% withholding, no India tax. During RNOR: US withholding + potentially reduced India tax if DTAA applies. After becoming Resident: s.89A helps but India taxes at slab rates. RNOR window is often optimal for large withdrawals.
Do I need to disclose 401k in India?
Yes — Schedule FA (foreign assets) requires disclosure of 401k/IRA balances from the first year you become Resident (not RNOR).