Moving back to India with US RSUs: the complete returning NRI playbook

A staff engineer who'd been in the Bay Area on H-1B for six years decided to move back to Bangalore in mid-2024. They'd accumulated $850,000 in US-vested RSU shares (Apple + their pre-Apple Microsoft tenure), $180,000 in a Fidelity 401(k), a Roth IRA opened in 2021 with ~$45,000 in it, a Chase checking account, a Charles Schwab brokerage with personal investments, and a small condo in San Jose they'd been renting out for the past year. They booked their flight, gave 30 days notice at work, sold their car, and showed up in India in July 2024.

Twelve months later, in mid-2025, they realized:

• The RSU vests that happened in 2024 after they returned to India should have been split — partially attributable to US service period (pre-return), partially to India service period (post-return). They'd treated the entire amount as either fully Indian (overpaying tax) or fully US (under-disclosing).
• They were RNOR for FY 2024-25 (the year of return). They could have legally sold roughly $200,000 of US shares in 2024 with zero Indian capital gains tax under the RNOR rules. They sold them in 2025 instead, by which point they were ROR and the gains were fully taxable at 12.5% LTCG under Section 112.
• They left the 401(k) with Fidelity. The annual reporting on Schedule FA for the 401(k) had two specific quirks they'd missed.
• The San Jose condo sale (which they eventually executed in 2026) triggered FIRPTA withholding at 15% of the sale proceeds — a US tax mechanic for non-US-resident sellers of US real estate they hadn't planned for.

None of these were dishonest mistakes. They were the predictable consequences of moving across two tax jurisdictions without a playbook.

This article is that playbook. The 12-month framework, asset-by-asset decisions, day-of-move logistics, and the year-of-return tax filings. If you're 6-12 months out from moving back to India from the US, this is your starting point. If you've already moved and are reading this in retrospect, the second half (recovery, year-of-return filings) is still actionable.

Three phases of the move

The framework that anchors everything else:

Phase	Window	Focus
Phase 1: Pre-move planning	6-12 months before departure	Maximize RNOR window value; structure US holdings for optimal tax treatment; set up India-side banking/accounts
Phase 2: Year of return	The financial year when you physically return	Tax-residency status determination; year-of-return filings in both countries; opportunistic RNOR-window sales
Phase 3: Post-return RNOR years	1-3 years after return (varies by your prior history)	Continue maximizing RNOR for foreign-source income; plan transition to ROR; Schedule FA disclosure annually

Each phase has specific actions. Most returning NRIs spend Phase 1 thinking about packing, Phase 2 reacting to filing surprises, and Phase 3 discovering retrospectively that Phase 1 was when most of the value could have been captured. The goal of this playbook is to flip that — to make Phase 1 the action-heavy phase and Phase 3 the smooth-execution phase.

Phase 1: Pre-move planning (the 6-12 months before departure)

This is where most of the tax-optimization opportunity lives, and where most returning NRIs leave it on the table because the move feels far away and the focus is on logistics.

1. Determine your RNOR eligibility.

Under Indian tax law (Section 6 + 6(6) of the Income Tax Act), you become RNOR in the year of return if either of these is true:

• You were non-resident in India for 9 out of 10 previous financial years, OR
• You were physically in India for 729 days or fewer across the previous 7 financial years

For a typical returning NRI who's been continuously in the US for 5+ years on H-1B/L-1/green card with no significant India trips, both conditions are usually met — RNOR status for the year of return (and often for 1-2 additional years after) is essentially guaranteed.

Why RNOR matters: During RNOR years, foreign-source income earned and received outside India is generally NOT taxable in India. This creates a window during which you can legally:

• Sell US stocks (capital gains stay in US — and the US doesn't tax non-resident-aliens on US-source capital gains for most asset types)
• Receive US dividends (taxable in US via WHT but not in India if received in US accounts)
• Receive US salary/bonuses for work performed before return (taxable in US, generally not in India)
• Receive partial-vest RSU portions attributable to pre-return US service period

Calculate your RNOR window before moving. For most US-to-India returnees, the window is 2-3 financial years (the year of return + 1-2 additional years until you "use up" the RNOR conditions).

2. Map all your US assets with a decision for each.

Build a single spreadsheet listing every US asset you own. For each, decide one of: Hold, Sell pre-move, Sell during RNOR window, Hold long-term.

Asset	Pre-move decision factors	Decision
Vested employer RSU shares	Concentration risk + RNOR LTCG sheltering	Likely: Hold or partial-sell during RNOR for diversification
ESPP shares	Same as RSU	Same
Personal brokerage stocks	Tax efficiency of selling in US vs India	RNOR-window sales make sense for highly appreciated names
401(k)	Penalty for early withdrawal vs continued growth	Most often: Hold; some sell strategies for high earners
Roth IRA	Tax-free in US; treatment in India is contested	Hold; complex for Indian tax
US bank checking/savings	Operational utility post-return	Keep one US bank account open
US brokerage cash	Currency timing question	Convert during RNOR window if rates favorable
US real estate (rental)	FIRPTA + rental-income complications	Most often: Sell pre-move or early in RNOR
HSA (Health Savings)	Tax treatment in India is unclear	Often: leave it; consult specialist

Asset-specific articles in this series go deeper:

• What happens to your 401(k) and IRA when you return to India
• Selling US property as a returning NRI
• RSU vesting during the year of return
• Becoming RNOR: the residency math

3. Plan your departure timing relative to the financial year.

The financial year for Indian tax purposes is April 1 to March 31. The date you physically depart the US (and become an Indian resident) determines which financial year captures the year-of-return rules.

The strategic question: depart early in the financial year vs late in the financial year?

Early-FY departure (April-September):

• More months as an Indian resident in the FY → more salary/income taxable in India during that FY
• Less of the FY where you're earning US-side income that needs reconciliation
• Generally simpler returns

Late-FY departure (December-March):

• Most of the FY income is from US-source / US-residency period
• For RNOR purposes, you'd still likely be classified as RNOR (the test is at the year-end, not based on departure date) — so foreign-source income from the pre-return US period stays untaxed in India
• More complex reconciliation (multiple tax events spanning the move)

For most returnees, early-FY departure is operationally cleaner. For high-net-worth returnees with significant year-end US bonuses/RSU vests, late-FY departure may capture those events under your US tax-resident treatment — a planning advantage. Run both scenarios through a cross-border CA.

4. Set up India-side infrastructure before departure.

• Open / reactivate an NRE (Non-Resident External) account at an Indian bank for parking USD remittances until you become resident
• Convert / open NRO (Non-Resident Ordinary) account for any Indian-source income during the year of return
• Get a PAN card update if your address changed (you can do this from the US via the e-portal)
• Update Aadhaar mobile number to one you'll have access to in India
• Open / verify your Income Tax e-filing portal access (you'll need OTP-via-Aadhaar)
• Apply for or renew Indian credit cards (some banks require a referee for non-resident applicants)

5. Notify your US broker(s) and update W-8BEN.

If you'll continue holding US shares post-move:

• Your W-8BEN may need to reflect your new India address
• Your broker may require additional KYC for non-US-resident account holders
• Some brokers (Charles Schwab Equity Awards, E*Trade Stock Plans, Morgan Stanley StockPlan Connect) are friendly to continued Indian-resident ownership; others (some discount brokers) may close personal investment accounts to non-US-residents
• Confirm with each broker before assuming the account will work post-move

6. Document everything for the eventual Indian tax filing.

For each US asset you'll hold post-move:

• Cost basis with acquisition date (for future capital gains calculation)
• USD valuation at last US tax-resident date (for entry into India)
• Account number and custodian details
• Any unrealized US tax positions (e.g., wash-sale carryforward losses, foreign tax credit positions)

Phase 2: The Year of Return — what to do during the FY you arrive

The year of return is the highest-stakes filing year of your life. Get the residency status right, file in two countries, claim the right credits.

1. Day of move logistics.

The physical move triggers several tax events:

• Your US tax residency ends when you cease to satisfy substantial presence (typically the date you physically leave the US, assuming no return visits before year-end)
• Your Indian tax residency begins per Section 6(1) (typically based on day-count for the financial year)
• For your departure year, you're often a US dual-status alien (US resident for part of the year, non-resident for the rest) AND an Indian resident for that FY

Keep exact records of:

• Departure date from US
• Arrival date in India
• All international travel for the year (you may need to substantiate residency tests)

2. The Indian filing for the year of return.

For the year of return (e.g., FY 2024-25 if you returned July 2024), you'll file ITR-2 declaring:

• Residential status: Resident (RNOR) — assuming the 9-out-of-10 test is met
• Schedule S: include any India-side employment income (if you started working in India during the FY) and the India-attributed portion of any RSU vests that happened post-return (apply the attribution rule)
• Schedule OS: include any Indian dividends, etc., received in India during the FY
• Schedule FA: disclose all foreign assets held at any point during the calendar year (Jan-Dec) — this is required even though you're RNOR
• Schedule FSI / Schedule TR: claim FTC for any US tax paid on income that flowed to Indian tax (e.g., RSU vest perquisite attributed partially to India where US side withheld tax)
• Form 44 (was Form 67 for AY 2025-26): filed separately before ITR-2 for FTC claim

The detailed walkthrough lives in RSU vesting during the year of return for the RSU-specific mechanics. The general 12-step ITR-2 workflow lives in From vest to ITR-2.

3. The US filing for your departure year.

You'll typically file Form 1040 (US tax resident) for the portion of the year you were a US tax resident, plus a dual-status statement. If you were a green card holder, the residency mechanics are slightly different (green card cancellation has its own procedure).

Key US filings to coordinate:

• Form 1040 (the federal return for your US-resident portion of the year)
• State return for whichever US state you lived in
• Form 8854 (only if you formally renounce US tax residency status under certain conditions — typically applies to green card holders or US citizens)
• Form 8938 (Statement of Specified Foreign Financial Assets) — for any Indian assets you may have accumulated during US residency

4. Opportunistic RNOR-window sales.

During the RNOR years, capital gains on US shares are generally not taxable in India (as long as the gain is not "received in India"). This is the planning window — if you have significant unrealized capital gains in US stocks, the RNOR years are when you can monetize them with the lowest tax friction.

The mechanics:

• Sell the appreciated US shares while RNOR (the gain is foreign-source, not received in India)
• Keep the proceeds in the US brokerage account (or US bank); do NOT immediately remit to India
• The gain is generally not taxable in India under RNOR rules
• In the US, since you're now a non-US-resident, capital gains on US shares are generally not US-taxable either (with specific exceptions for US real estate via FIRPTA)
• Result: a meaningful capital gain that escapes both tax jurisdictions

Watch the "received in India" trigger. If you remit the sale proceeds to India during the same RNOR year, the proceeds are arguably "received in India" — though the gain versus the principal has different treatment, and the question of whether remittance triggers gain recognition is debated. Conservative approach: hold the cash in the US for at least one full FY after sale before remitting.

Watch the "becomes ROR mid-year" risk. RNOR is determined for the full FY. If your status during a sale was RNOR, the sale stays RNOR-treated for that FY regardless of when within the year you become ROR for a subsequent year.

Phase 3: The post-return RNOR years and the ROR transition

Most returning NRIs are RNOR for 1-3 years after the year of return, depending on history. The transition to ROR happens when you fail both Section 6(6) tests.

During RNOR years:

• Continue selling appreciated US shares opportunistically (same logic as Year-of-Return)
• File ITR-2 annually with Schedule FA disclosure (always required, regardless of RNOR status)
• File Form 44 for any US tax paid on dividends or other income
• Convert US dividends to INR only as needed for India consumption (don't bulk-remit just for the sake of it)

The ROR transition happens when:

• You've been resident in India for at least 2 of the previous 10 financial years, AND
• You've spent more than 729 days in India across the previous 7 financial years

For most returning NRIs, this is FY 4 or 5 post-return.

From ROR onward:

• Worldwide income is fully taxable in India (no RNOR shield)
• US capital gains from US shares are taxable in India under Section 112 (12.5% LTCG if held >24 months)
• US dividends taxable at slab + FTC for US WHT
• Schedule FA continues annually

The ROR transition is when you'd ideally have already used your RNOR window for major US-asset sales. Once ROR, the tax efficiency gap closes.

Five common errors returning NRIs make

1. Skipping Schedule FA in the RNOR years thinking exemption applies. RNOR exempts you from tax on certain foreign income, but Schedule FA disclosure is independent of tax liability. Black Money Act consequences (30% tax + 3× penalty + prosecution) apply for missing disclosure regardless of RNOR status.

2. Treating all US-vest perquisites as fully Indian. RSU vests during the year of return should be attributed proportionally between US-service period (pre-return) and India-service period (post-return). Filing the entire vest as Indian perquisite overpays; filing none as Indian perquisite under-discloses.

3. Closing all US accounts on departure. Some returnees close all US accounts on day of move, thinking it simplifies things. This forces same-day sale of all US holdings, often at inopportune prices, and converts the gain into Indian-taxable transactions in subsequent years. Keep at least one US bank + one US brokerage open.

4. Missing the FIRPTA on US real estate sale. When a non-US-resident sells US real estate, the IRS requires 15% withholding from sale proceeds (FIRPTA). Most returnees don't plan for this and end up with a cash-flow surprise at sale settlement. Plan for it, or sell pre-move.

5. Not using the RNOR window for asset sales. This is the most expensive omission. Selling a $200,000 US share holding during RNOR vs after ROR transition is the difference between ~Rs 0 Indian tax and ~Rs 25 lakh Indian tax (at 12.5% LTCG on the gain portion). Most returnees realize this in retrospect.

When to hire professionals

For these scenarios, hire specialists before filing:

• Your year of return — get a cross-border CA who specializes in returning NRIs
• US property sales — get both a US CPA and an Indian CA
• 401(k) / IRA decisions — get a US-Indian tax advisor familiar with retirement account treatment
• Multi-year transition where RNOR status is borderline — get a CA to run the residency math
• High-net-worth individuals with multiple assets — consider a wealth advisor in addition to tax

Typical fee ranges:

• Cross-border CA for the year-of-return return: Rs 50,000 – Rs 2,00,000
• US CPA for dual-status filing: $500-$1,500
• US property sale FIRPTA recovery: $500-$1,500
• Multi-year tax planning: Rs 1,00,000 – Rs 3,00,000

Material money, but cheap relative to the Black Money Act exposure (potentially 30% tax + 3× penalty + prosecution) or the missed RNOR window opportunity cost.

The deeper articles in this series

This article is the master overview. Each phase has a deeper article:

• Becoming RNOR: the residency math and timing — Section 6 + 6(6) deep dive, how to maximize the RNOR window, day-count math for borderline cases
• What happens to your 401(k) and IRA when you return to India — the retirement account question every returning NRI asks, including the Roth IRA treatment ambiguity
• Selling US property as a returning NRI — FIRPTA mechanics, capital gains in both countries, repatriation logistics
• RSU vesting during the year of return — the attribution rule, worked example, documentation requirements

Foundational cross-references for the RSU side:

• RSU vesting while in US vs India — the bilateral residency framework
• Schedule FA disclosure guide — the calendar-year disclosure mechanic that survives all residency states

RSU concentration and diversification

By the time you're returning to India, you've likely accumulated significant US employer-stock concentration through your years of RSU vests. Many returnees hold $500K-$2M in single-stock employer shares.

Returning to India is one of the natural moments to diversify aggressively — your career path is changing, your concentration risk is high, and the RNOR window may allow capital gains realization at favorable tax treatment.

Rovia is built specifically for Indian residents looking to diversify out of concentrated US employer stock. Transfer your vested shares from Morgan Stanley / Schwab / E*Trade / Fidelity directly to Rovia (in-kind transfer, no taxable event), then redeploy into diversified US ETFs or other US stocks while keeping the assets in the foreign-equity bucket and the original LRS treatment intact. The transfer itself is not a sale event, so no STCG/LTCG is triggered.

For returning NRIs specifically, this is often the highest-impact decision in the entire transition — the difference between continuing to hold a 70%-concentrated position and a properly diversified post-move portfolio.

Final checklist — the 90-day pre-move countdown

If you're 90 days out:

Days before move	Action
90-60	Decision on each US asset (hold/sell/transfer)
90-60	Confirm broker willingness to maintain non-US-resident account
90-60	Open NRE/NRO accounts in India
60-30	Schedule final US tax document collection (W-2, 1099s, year-end statements)
60-30	Get USD foreign currency for first month in India
60-30	Update W-8BEN with broker for new India address
30-15	Notify HR / People Ops of departure date for global mobility paperwork
30-15	Final logistics: shipping, lease termination, address change
15-0	Document everything for tax records (departure date, final US salary date, final US asset valuations)

If you're 30-90 days post-move:

• Don't panic about retrospective filing — Phase 2 and 3 are still actionable
• Hire a cross-border CA before the next ITR-2 filing deadline
• Begin the RNOR-window opportunistic sale planning for the current FY
• Confirm Schedule FA disclosure obligations for the relevant calendar years

The move itself is logistics. The tax-asset-residency planning is the financial decision that matters for the next decade.