Non-Resident Indian
Residential Status under Income Tax & FEMA – Classic Partner
Expert Guidance for NRIs, PIOs & OCIs
Understanding your residential status in India is the foundation of your tax and compliance obligations. Under the Income-tax Act, 1961 and the Foreign Exchange Management Act (FEMA), your residential status determines how your income is taxed, the investments you can make, and the regulations you must follow.
At Classic Partner, we specialize in assisting Non-Resident Indians (NRIs), Returning Indians, PIOs, and OCIs with accurate residential status determination and related compliance.
Residential Status under the Income-tax Act, 1961
Your residential status is based on the number of days spent in India during a financial year (1st April – 31st March). Even days of arrival and departure are counted.
1. Who is a Non-Resident (NRI)?
An individual is treated as an NRI if:
Stayed in India for less than 182 days during the financial year, OR
Stayed in India for less than 60 days in the year and 365 days in the preceding 4 years.
Exceptions (60-day rule extended to 182 days):
Indian citizens leaving India for employment – 182 days
Crew members of Indian ships – 182 days
Indian citizens/PIOs visiting India with income < ₹15 lakhs – 182 days
Indian citizens/PIOs visiting India with income > ₹15 lakhs – 120 days
2. Deemed Resident – As per Finance Act, 2020
An individual will be treated as a Deemed Resident if:
He is an Indian citizen,
Has income in India exceeding ₹15 lakhs (excluding foreign income),
And is not liable to tax in any other country.
They will be classified as Resident but Not Ordinarily Resident (RNOR).
3. Resident Categories – ROR vs RNOR
Resident and Ordinarily Resident (ROR): Taxable on global income in India.
Resident but Not Ordinarily Resident (RNOR): Limited taxation; foreign income generally not taxed.
A returning NRI can qualify as RNOR for 2 years, reducing tax liability on global income.
Residential Status under FEMA
FEMA goes beyond day count—it also considers intention and purpose of stay.
You are a resident in India if you stayed for 182+ days in the preceding year and intend to stay indefinitely.
You are a non-resident if you leave India for employment, business, or an uncertain stay abroad.
You become a resident again once you return with the intent to settle or work in India.
Common FEMA Scenarios:
Leaving India for a job abroad → Non-resident from departure date
Student going abroad for studies → Non-resident
Returning to India to settle → Resident from date of arrival
Foreign national setting up business in India → Resident from business start da
PIO (Person of Indian Origin) & OCI (Overseas Citizen of India)
PIO: Person with Indian ancestry (self, parents, or grandparents) but foreign citizenship.
OCI: Foreign national of Indian origin with special privileges.
Lifelong multiple-entry visa
No police registration required
Same rights as NRIs in economic, financial, and educational matters
Cannot own agricultural/plantation land
Why Choose Classic Partner?
Our team provides specialized assistance in:
Determining residential status under Income Tax & FEMA
Filing the right ITR for NRIs, RNORs, and Residents
Advisory on global income tax planning & DTAA
FEMA compliance and RBI reporting support
Guidance for PIO/OCI eligibility and privileges
Consult Classic Partner Today
Your residential status directly affects your taxes, investments, and compliance in India. With Classic Partner’s expert Chartered Accountants, you get clarity, accuracy, and peace of mind.
Book a consultation now and let us handle your NRI and FEMA compliance with professionalism.
