Residential Status Under Section 6 of Income Tax Act: NRI Rules

Residential status under Section 6 of the Income Tax Act decides how much of your income India can tax, and you are a resident if you spend 182 days or more in India in a financial year. You are also a resident with 60 days in the year and 365 days in the 4 years before it.

Citizenship does not decide it. Below: the day-count tests, the exceptions for people leaving or visiting India, the deemed resident rule, ROR vs RNOR vs NRI, and worked examples.

What Is Residential Status Under Section 6?

Residential status is the label the Income Tax Act, 1961 gives a person for one financial year, and it sets the reach of Indian tax on their income. Section 6 defines three outcomes for an individual: resident and ordinarily resident (ROR), resident but not ordinarily resident (RNOR) and non-resident (NR).

The status is worked out again every year. It is not the same as being an NRI under foreign exchange law, which uses a different test (see the FEMA section below).

Residential Status Under Section 6 at a Glance
Status	Short form	Taxed in India on
Resident and ordinarily resident	ROR	Global income
Resident but not ordinarily resident	RNOR	Indian income, plus foreign income only from a business controlled in India or a profession set up in India
Non-resident	NR (NRI)	Income received, accruing or arising in India, or deemed to

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Which Tests Make an Individual a Resident?

An individual is a resident if either of two conditions is met, and a person who meets neither is a non-resident. Both look at days of physical stay in India.

Basic Conditions Under Section 6(1)
Condition	Days in India this year	Days in India in the 4 earlier years
Condition 1	182 days or more	Not relevant
Condition 2	60 days or more	365 days or more

Meeting any one condition makes you a resident for the year. The 4 earlier years are the 4 financial years immediately before the current one.

Exceptions for Indian Citizens Who Leave or Visit India

Indian citizens who leave India for work, or who visit India from abroad, get a longer threshold than the basic 60 days. The change from the 60 day test is the single most important rule for NRIs.

Modified Day Tests for Indian Citizens and Persons of Indian Origin
Situation	Test for resident	Result if the test is met
Citizen leaves India for employment abroad, or as crew of an Indian ship	182 days or more in the year (the 60 day test is dropped)	Resident
Citizen or person of Indian origin living abroad visits India, Indian income Rs 15 lakh or less	182 days or more in the year (the 60 day test is dropped)	Resident
Citizen or person of Indian origin living abroad visits India, Indian income above Rs 15 lakh	120 days or more in the year and 365 days or more in the 4 earlier years	Resident, and RNOR if the stay is under 182 days

The Rs 15 lakh limit is counted on total income other than income from foreign sources. A person of Indian origin is someone whose parents or grandparents were born in undivided India.

For crew members, Rule 126 of the Income-tax Rules, 1962 excludes the period between joining and signing off on an eligible voyage, as recorded in the Continuous Discharge Certificate.

ROR vs RNOR: When Is a Resident Not Ordinarily Resident?

A resident individual is an ROR only if both of two additional conditions are met, and is an RNOR if either fails. These tests look back further than the residency tests do.

Conditions for Resident and Ordinarily Resident (Section 6(6))
Condition	ROR needs
Residence in the 10 earlier years	Resident in at least 2 of the 10 years
Stay in the 7 earlier years	730 days or more in total

So a resident is an RNOR when they were non-resident in 9 of the 10 earlier years, or stayed 729 days or less in the 7 earlier years. There are two more routes to RNOR, covered below: the 120 day citizen rule and the deemed resident rule.

Typical RNOR: an NRI who returns to India for good after many years abroad.

120 day citizen: a citizen or person of Indian origin with Indian income above Rs 15 lakh who stays 120 to 181 days.

Deemed resident: an Indian citizen taxed nowhere else, with Indian income above Rs 15 lakh.

Only individuals and HUFs can be RNOR. Every other kind of taxpayer is either resident or non-resident.

Non-Resident and NRI Status: How Many Days to Become an NRI?

You become a non-resident for tax when you fail both resident tests, which means under 182 days in India and either under 60 days or under 365 days in the 4 earlier years. For an Indian citizen who left for work abroad, staying under 182 days is enough.

Quick Answer: Days in India and Tax Status (individual, current financial year)
Who you are	Days in India this year	Status
Indian citizen working abroad	Under 182	Non-resident
Indian citizen visiting, Indian income Rs 15 lakh or less	Under 182	Non-resident
Indian citizen visiting, Indian income above Rs 15 lakh	Under 120	Non-resident
Indian citizen visiting, Indian income above Rs 15 lakh	120 to 181, with 365+ days in the 4 earlier years	Resident, RNOR
Foreign citizen	Under 60, or 60+ with under 365 in the 4 earlier years	Non-resident
Anyone	182 or more	Resident

Deemed Resident Under Section 6(1A)

A deemed resident is an Indian citizen whose Indian income exceeds Rs 15 lakh and who is not liable to tax in any other country because of domicile, residence or a similar criterion. The rule applies from FY 2020-21 and is aimed at people living in countries that levy no income tax.

A deemed resident is a resident only for tax purposes and is always an RNOR. That means foreign income stays outside Indian tax, but Indian income does not.

Citizenship matters here, and only here. The deemed resident rule is the one place where being an Indian citizen changes the answer, because a foreign citizen cannot be a deemed resident.

How to Count Days of Stay in India

Count every day you were physically in India, including the day of arrival and the day of departure. The stay does not need to be continuous or for any particular purpose.

Stay in the territorial waters of India, up to 12 nautical miles from the coast, counts as stay in India.

Citizenship, place of birth and domicile are not part of the count.

Use passport stamps, e-gate records and flight bookings to build the count, and keep them for assessment purposes.

Count the financial year, 1 April to 31 March, and not the calendar year.

A person can be a tax resident of more than one country in the same year. A tax treaty then decides which country gets the primary right to tax.

What Income Is Taxable for ROR, RNOR and Non-Residents?

A ROR is taxed on worldwide income, an RNOR on income with an Indian link, and a non-resident only on income received or earned in India. Section 5 of the Act sets this out and Section 7 adds income deemed to be received.

Taxability of Income by Residential Status
Type of income	ROR	RNOR	Non-resident
Received or deemed received in India	Taxable	Taxable	Taxable
Accrues or arises in India (even if received abroad)	Taxable	Taxable	Taxable
Accrues abroad, received in India	Taxable	Taxable	Taxable
Accrues abroad, from a business controlled in India or a profession set up in India	Taxable	Taxable	Not taxable
Accrues abroad and is received abroad, no Indian link	Taxable	Not taxable	Not taxable

Interest on a fixed deposit with an Indian bank is received in India, so it is taxable for all three. A payment from an Indian company into a foreign bank account for services given to it accrues from India, so it is also taxable for all three.

Resident individuals get relief for tax already paid abroad under Sections 90 and 91, and claim it by filing Form 67 on the e-Filing portal. The Section 10 exemptions guide lists the income that stays exempt whatever your status.

Residential Status Examples for FY 2025-26

Each example below applies the tests in order: basic day test, exception for citizens, then ROR or RNOR. The days are illustrative.

Example 1: Rohan, Indian citizen working in Dubai, visits India for 90 days
Step	Check	Result
Left India for employment abroad	Only the 182 day test applies	90 days is under 182
Status	Fails the test	Non-resident
Taxed in India on	Indian rent and interest only	His Dubai salary stays outside Indian tax

Example 2: Priya, a foreign citizen, stays 75 days and 380 days in the 4 earlier years
Step	Check	Result
Condition 2	75 days (60+) and 380 days (365+)	Resident
10 earlier years	Non-resident in 9 of the 10 years	Fails the ROR test
Status	Resident but fails ROR	RNOR

Example 3: Arjun, Indian citizen in Singapore, stays 130 days with 400 days in the 4 earlier years
Indian income	Test applied	Status
Rs 18 lakh (above Rs 15 lakh)	120 days and 365 days in 4 years: both met	Resident, RNOR (stay under 182)
Rs 12 lakh (Rs 15 lakh or less)	182 days: 130 is under 182	Non-resident

Example 4: Meera returns to India in August 2025 after 12 years abroad and stays 236 days
Step	Check	Result
Days from 8 Aug 2025 to 31 Mar 2026	236 days, which is 182 or more	Resident
10 earlier years	Non-resident in all 10, so resident in fewer than 2	Fails the ROR test
Status	Resident but fails ROR	RNOR for FY 2025-26

Example 5: Kabir, Indian citizen in a country with no income tax, Indian income Rs 20 lakh, stays 40 days
Step	Check	Result
Basic and citizen tests	40 days is under every threshold	Would be non-resident
Deemed resident rule	Citizen, Indian income above Rs 15 lakh, not taxed elsewhere	Deemed resident
Status	Deemed resident	RNOR

The Indian income in these examples still has to be taxed at slab rates. The Income Tax Calculator gives the figure for a resident, and the Old vs New Tax Regime Calculator shows which regime suits you.

Residential Status of HUF, Company, Firm and LLP

Entities are tested on where they are managed and not on days of stay. Only a HUF can be an RNOR among them.

Residential Status of Non-Individual Taxpayers
Taxpayer	Resident if	Otherwise
HUF	Control and management is wholly or partly in India	Non-resident
HUF: ROR vs RNOR	Karta resident in 2 of 10 earlier years and 730+ days in the 7 earlier years	RNOR
Indian company	Always	Not applicable
Foreign company	Place of effective management is in India during the year	Non-resident
Firm, LLP, AOP, BOI, local authority	Control and management is not wholly outside India	Non-resident

Place of effective management is where key management and commercial decisions are made, and a foreign company that has even a part of the year managed from India is at risk. Under CBDT guidelines, the test is not applied to a foreign company with turnover or gross receipts of Rs 50 crore or less in the year.

What NRIs and Returning NRIs Must Know

Your status changes what you file, what tax is deducted and what you must disclose. These are the points that cause the most notices.

ITR form: NRIs and RNORs cannot use ITR-1. File ITR-2, or ITR-3 if you have business or professional income.

Foreign assets: a resident other than RNOR must disclose foreign assets in Schedule FA. Non-disclosure can draw a Rs 10 lakh penalty under the Black Money Act, though non-immovable assets up to Rs 20 lakh in total are exempt from it.

Property sale: the buyer deducts TDS under Section 195 when an NRI sells property in India. The long-term capital gains rate is 12.5%, plus surcharge and cess, and a lower deduction certificate under Section 197 can reduce the TDS.

Forms 15G and 15H: these are for residents only, and an NRI cannot submit them.

Treaty relief: to claim a tax treaty benefit abroad you need a tax residency certificate from the other country and Form 10F.

New regime: an NRI can choose either regime, so compare them as a resident would.

The Capital Gains Calculator estimates the gain on a property or shares sale, and the TDS Calculator shows how much a payer will deduct. The TDS rate chart lists the rates by section.

Declare the right status on KYC forms, since banks and mutual funds use it to decide on TDS and account type. The deadline for your return is on the ITR filing last date page.

Income Tax Residency vs FEMA: Are They the Same?

No, the Income Tax Act and the Foreign Exchange Management Act (FEMA) use different tests, so you can be a resident for one and an NRI for the other. The Income Tax Act counts days in the financial year, while FEMA looks at your stay in the preceding year and the purpose of travel.

Income Tax Act vs FEMA on Residence
Point	Income Tax Act, Section 6	FEMA
Purpose	Decides which income India taxes	Governs bank accounts, investments and remittances
Test	Days of stay and look-back years	Stay in the preceding year and purpose such as employment abroad
Where it is used	Income tax return, TDS	NRE and NRO accounts, KYC, investing in India

The Reserve Bank of India issues the FEMA rules. Check them before you open or convert an NRE or NRO account.

Residential Status Under the Income-tax Act, 2025

The Income-tax Act, 2025 keeps the same residence tests and applies from 1 April 2026. It speaks of the tax year in place of the previous year, and the sub-section numbers change.

Section 6 of the 1961 Act still governs income earned up to 31 March 2026. That covers the return for FY 2025-26 (AY 2026-27), so the rules in this guide apply to it directly.

How to find your residential status in 5 steps

Count days this year

Add every day in India from 1 April to 31 March, including arrival and departure days.

Count days in the 4 earlier years

Add your stay in each of the 4 financial years before this one.

Apply the tests

Use 182 days, or 60 days with 365 days in 4 years. Swap in 182 days if you left for work abroad, or 120 days if you visit with Indian income above Rs 15 lakh.

Check deemed residence

An Indian citizen with Indian income above Rs 15 lakh and no tax liability elsewhere is an RNOR.

Split resident into ROR or RNOR

Look back 10 and 7 years to decide, then file the right ITR form.

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Frequently Asked Questions: Residential Status

What is residential status under Section 6 of the Income Tax Act?

Residential status under Section 6 is the classification that decides how much of your income India can tax in a financial year. It has three outcomes: resident and ordinarily resident (ROR), resident but not ordinarily resident (RNOR) and non-resident (NR), and it is worked out afresh every year.

How many days do you need to stay in India to be a resident?

You are a resident if you stay in India for 182 days or more in the financial year. You are also a resident if you stay 60 days or more in the year and 365 days or more in the 4 years before it.

How many days to become an NRI?

You become a non-resident for tax when you meet neither residency test: fewer than 182 days in India in the year, and either fewer than 60 days in the year or fewer than 365 days in the 4 earlier years. An Indian citizen who leaves for work abroad needs only to stay under 182 days.

What is the 182 days rule for tax in India?

The 182 days rule says a person present in India for 182 days or more in a financial year is a resident for that year. Both the day of arrival and the day of departure count as days in India.

What is the difference between ROR, RNOR and NRI?

A ROR is taxed on global income, an RNOR is taxed on Indian income and on foreign income only from a business controlled in India or a profession set up in India, and an NRI is taxed only on income received or earned in India. The three differ in how much foreign income India can reach.

When is a resident treated as RNOR?

A resident is an RNOR if they were non-resident in 9 of the 10 earlier years, or stayed in India 729 days or less in the 7 earlier years. Indian citizens who qualify under the 120-day rule, and deemed residents, are also RNOR.

What is the 120 days rule for NRIs?

The 120 days rule applies to an Indian citizen or person of Indian origin whose Indian income exceeds Rs 15 lakh and who visits India. Such a person is a resident if they stay 120 days or more in the year and 365 days or more in the 4 earlier years, and is classed RNOR if the stay is under 182 days.

Who is a deemed resident under Section 6(1A)?

A deemed resident is an Indian citizen whose Indian income exceeds Rs 15 lakh and who is not liable to tax in any other country because of domicile or residence there. A deemed resident is always an RNOR, whatever the number of days spent in India.

Does the Rs 15 lakh limit include foreign income?

No. The Rs 15 lakh limit is counted on total income other than income from foreign sources. Foreign income does not push you over the limit.

Is residential status the same as citizenship?

No. Residential status depends on days of stay and not on citizenship, birthplace or domicile. An Indian citizen can be a non-resident, and a foreign citizen can be a resident of India for a year.

Does the stay in India have to be continuous?

No. Days are added up across the year, and the stay need not be continuous or for any specific purpose. Presence in India's territorial waters up to 12 nautical miles also counts.

Is the residential status decided once or every year?

It is decided every financial year, separately. You can be a resident one year and a non-resident the next, which is why the earlier 4, 7 and 10 year tests exist.

What income is taxable for a non-resident in India?

A non-resident is taxed on income received or deemed to be received in India, and on income that accrues or arises in India or is deemed to do so. Examples are rent from an Indian property, interest on Indian bank deposits and fees from an Indian payer.

Is foreign income taxable for a resident Indian?

Yes, for a ROR. A resident and ordinarily resident is taxed on global income, with relief from double taxation through a tax treaty or Sections 90 and 91. An RNOR is not taxed on foreign income unless it comes from a business controlled in India or a profession set up in India.

How is the residential status of a company decided?

An Indian company is always resident. A foreign company is resident only if its place of effective management during the year is in India.

How is the residential status of a HUF decided?

A HUF is a resident unless its affairs are controlled and managed wholly from outside India. A resident HUF is ROR if the Karta is resident in at least 2 of the 10 earlier years and stayed 730 days or more in the 7 earlier years, otherwise it is RNOR.

Is the NRI definition under FEMA the same as under the Income Tax Act?

No. The Foreign Exchange Management Act uses a separate test, so you can be an NRI for bank accounts and investments and a resident for income tax in the same year. The Reserve Bank of India notifies the FEMA rules, and banks use them for KYC.

Can an NRI file Form 15G?

No. Form 15G and Form 15H are for resident individuals who want no TDS deducted. A non-resident cannot submit them, so the residential status declared on the form must be accurate.

Which ITR form does an NRI or RNOR use?

An NRI or RNOR cannot use ITR-1. They file ITR-2 when they have no business income, or ITR-3 when they have business or professional income.

Do residents have to report foreign assets in the ITR?

Yes. A resident other than an RNOR must disclose foreign assets and foreign income in Schedule FA, and non-disclosure can attract a penalty of Rs 10 lakh under the Black Money Act. Non-immovable foreign assets worth up to Rs 20 lakh in aggregate are exempt from that penalty, but foreign immovable property is not.

What changes under the Income-tax Act, 2025?

The Income-tax Act, 2025 applies from 1 April 2026 and keeps the same residence tests, now written in terms of the tax year. Section 6 of the 1961 Act still governs FY 2025-26, which is the year you report in the return for AY 2026-27.

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Disclaimer: Rules reflect Section 6 of the Income Tax Act, 1961 for FY 2025-26 and can change with each Finance Act. Confirm the current position on the Income Tax Department website or with a qualified Chartered Accountant, especially for cross-border cases. This page is general information and not tax advice.

Residential Status Under Section 6 of Income Tax Act: ROR, RNOR and NRI Rules