Will my FCNR deposit stay tax-free after I return to India?

Under the Income-tax Act, 2025, interest on FCNR deposits is tax-exempt for non-residents or residents but not ordinarily resident (RNOR).

After returning to India, the exemption continues only while the individual qualifies as RNOR; once resident and ordinarily resident (ROR), the interest becomes taxable.

FEMA allows FCNR deposits to continue until maturity even after becoming a person resident in India; maturity proceeds can be transferred to a Resident Foreign Currency (RFC) Account.

A five-month stay in India in FY 2025-26 may trigger Indian tax residency if the visit threshold of 120 days is exceeded, depending on taxpayer's status and total stay.