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Residential Status under the Income Tax Act, 1961
Your residential status decides whether only your Indian income or your entire global income is taxable in India. We determine your status accurately under the Income Tax Act, 1961 and the new Income Tax Act, 2025.
Check Your Residential StatusWhy Residential Status Matters
Residential status is the foundation of every NRI tax filing in India. A Non-Resident pays Indian tax only on India-sourced income, an RNOR pays tax on Indian income plus foreign income from a business controlled from India, and a Resident and Ordinarily Resident (ROR) is taxed on global income. Getting this classification wrong is the most common — and most expensive — NRI tax mistake.
The same day-count framework continues under the Income Tax Act, 2025 (Section 6) applicable from 1 April 2026, so your status for FY 2025-26 and earlier years is tested under the 1961 Act, and later years under the new Act.
Who is a Resident? The Day-Count Tests
You are a resident of India for a financial year (1 April – 31 March) if you satisfy either condition:
- Stay in India for 182 days or more during the financial year; or
- Stay in India for 60 days or more during the year and 365 days or more in the 4 preceding years.
If you meet neither condition, you are a Non-Resident (NRI). Days of arrival and departure both count as days in India.
Key Exceptions and Special Rules
- Indian citizens leaving for employment abroad or as crew of an Indian ship — only the 182-day test applies.
- Visiting NRIs/PIOs with Indian income up to Rs. 15 lakh — only the 182-day test applies.
- Visiting NRIs/PIOs with Indian income above Rs. 15 lakh — the 60-day limit becomes 120 days; a 120–181 day stay makes them RNOR.
- Deemed residency: an Indian citizen with Indian income above Rs. 15 lakh who is not liable to tax in any other country is deemed an RNOR even with zero days in India.
ROR vs RNOR
- ROR (Resident and Ordinarily Resident): global income taxable in India; foreign assets reportable in Schedule FA.
- RNOR (Resident but Not Ordinarily Resident): only Indian income (and foreign income from a business controlled from India) is taxable.
- A returning Indian can typically retain RNOR status for 2–3 years — a valuable tax planning window.
Residential status under FEMA follows different, intention-based rules — see our detailed Non-Resident Indian page for the FEMA framework and how the two interact.
Frequently Asked Questions
How is residential status determined under the Income Tax Act?
It is based on the number of days you stay in India during the financial year: 182 days or more makes you a resident, as does 60 days or more in the year combined with 365 days or more in the preceding 4 years, subject to special exceptions for citizens working abroad and visiting NRIs/PIOs.
What is the 120-day rule for NRIs?
Indian citizens or PIOs visiting India whose Indian income exceeds Rs. 15 lakh become resident (as RNOR) if they stay 120 days or more in the year along with 365 days in the preceding 4 years, instead of the normal 182-day threshold.
What is deemed residency?
An Indian citizen with Indian income above Rs. 15 lakh who is not liable to tax in any other country by reason of domicile or residence is deemed a resident of India, classified as RNOR, even without staying in India.
Does the new Income Tax Act, 2025 change residential status rules?
No major change. The Income Tax Act, 2025, effective 1 April 2026, carries forward the same 182-day, 60/365-day, 120-day, and deemed residency framework in Section 6, so existing planning principles continue.
Are arrival and departure days counted as stay in India?
Yes. Both the day of arrival in India and the day of departure from India are counted as days of stay when computing your residential status.
Unsure of your residential status?
Share your travel dates and income details, and our Chartered Accountants will determine your exact status and its tax impact.
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