Indian Consultant's Site

Income from abroad of NRIs settled in India

NRIs returned to India will be considered Resident but Not Ordinary Resident (RNOR) for the period of nine years after returning to India.
Taxation of income of RNOR is confinded to following income:
Income that accrues or arise in India or is deemed to accrue or arise in India
Income that us received or is deemed to be received in India
Income that accrues or arise outside India only to the extent,the income which is from business controlled from India or profession set up in India.

Any income received in India even if it accrued outside India,it will be taxable.
If the income is first received abroad and subsequently brought into India , it will not be tacable in hands of person who is RNOR if it had accrues and arises outside India.
Place of receipt is vital.So simply by depositing all income which accrue or arise outside India into bank account abroad at the first instance , tax incidence can be avoided.
Income accrued outside India will be exempt in hands of returning Indian till he is RNOR.

Business controlled in India means the head and brain of the business is situated in India and business operations are directed from India.

Returning person carrying business through non corporate entity outside India needs to be careful.In case of non-corporate entities the control and management should be wholly outside India to qualify as a non resident.
Hence even if a part of control or management is in India ,non corporate entity would be considered as resident in India and therefore liable to taxable on its world income.

So , returning NRIs should make proper planning of his /her income before coming to India for permanent settlement.

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