NRI and overseas · Residence and returns
How is residential status decided for income tax: the 182-day and 120-day rules?
Short answer
You are resident in a tax year if you are in India for 182 days or more, or for 60 days or more and 365 days in the four previous years. For Indian citizens and persons of Indian origin visiting India, 60 becomes 182, except that it becomes 120 if Indian income exceeds ₹15 lakh. An Indian citizen with Indian income above ₹15 lakh who is not taxed in any other country is also treated as resident. Such cases are usually 'not ordinarily resident'.
Step 1: resident or non-resident
You are resident in a tax year if either:
- you are in India for 182 days or more in the year; or
- you are in India for 60 days or more in the year and 365 days or more in the four preceding years.
Exceptions to the 60-day test:
| Person | 60 days becomes |
|---|---|
| Indian citizen leaving India for employment abroad, or as a crew member of an Indian ship | 182 days |
| Indian citizen or person of Indian origin visiting India | 182 days, or 120 days if total income other than from foreign sources exceeds ₹15 lakh |
Deemed resident: an Indian citizen whose total income, other than from foreign sources, exceeds ₹15 lakh and who is not liable to tax in any other country because of domicile or residence is treated as resident.
Step 2: ordinarily resident or not
A resident is not ordinarily resident (RNOR) if:
- they were non-resident in 9 out of the 10 preceding years; or
- they were in India for 729 days or less in the 7 preceding years; or
- they became resident only through the 120-day rule or the deemed resident rule.
What is taxed
| Status | Taxed in India on |
|---|---|
| Resident and ordinarily resident | Worldwide income |
| Resident but not ordinarily resident | Indian income, plus foreign income from a business controlled or profession set up in India |
| Non-resident | Indian income only: income received or arising in India |
Practical points
- Count days from the passport stamps and travel records; the days of arrival and departure are usually both counted as days in India.
- Status is decided each tax year separately.
- A person can be resident in India and in another country in the same year; the tax treaty then decides residence for treaty purposes.
- Status under FEMA (for bank accounts and investments) follows different rules.
Legal basis
- Section 6, Income-tax Act, 1961, and section 6, Income-tax Act, 2025
Official sources
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