Resident, RNOR or Non-Resident: The Question That Decides What India Can Tax

Before anything else in a cross-border matter is worth arguing, one question has to be settled: was the person resident in India for that year. It decides what India can tax at all. Get it wrong and every computation after it is wrong too.

Most people answer it from memory of the 182-day rule. That rule is still there, but since 2020 it is no longer the whole of it: a visitor can become resident on 120 days, and a citizen can be resident having spent no days in India at all.

Our residential status calculator works a given year out and shows which limb decided it. This note explains what the limbs are.

The two basic tests

An individual is resident in India for a previous year if either is met:

1. Present in India for 182 days or more during that year; or
2. Present for 60 days or more during that year, and 365 days or more across the four preceding years.

Days are counted as days of physical presence, and both the day of arrival and the day of departure count. That is not a rounding convention, it is the difference between 181 and 182 for somebody who flies in on the evening of one day and out on the morning of another.

Four things that change the second test

The 60-day limb is the one that moves, and this is where the answer usually turns.

• Leaving India for employment abroad, or as a member of the crew of an Indian ship: 60 becomes 182. Somebody who leaves mid-year for a job overseas is resident only if they were here 182 days.
• A citizen or person of Indian origin visiting India: 60 becomes 182 as well.
• That same visitor, with income other than from foreign sources above ₹15 lakh: 60 becomes 120, not 182. This is the 2020 amendment, and it is the single most-missed provision in the section.
• Nothing at all applies: the ordinary 60 days stands.

Note what the third does. A returning professional on 130 days in India, with Indian income over ₹15 lakh and four preceding years adding to more than 365 days, is resident. On the same facts before 2020 they were non-resident. Nothing about their travel changed.

Resident without being in India

Section 6(1A) is the other departure from day-counting. An Indian citizen is deemed resident where both of these hold:

• total income other than income from foreign sources exceeds ₹15 lakh; and
• the person is not liable to tax in any other country by reason of domicile, residence, or any criterion of a similar nature.

It applies to citizens only. A person of Indian origin who is not a citizen falls outside it however their income is arranged.

The second condition is about legal liability, not about what was actually paid. Someone resident in a jurisdiction that levies no income tax is not "liable to tax" there, and that is precisely who the provision was written for.

Being resident is not the end of it

A resident is further either Ordinarily Resident or Not Ordinarily Resident, and that second distinction is where foreign income actually escapes. A resident is Not Ordinarily Resident if any one of these is true:

• non-resident in India in nine or more of the ten preceding years;
• present in India for 729 days or fewer across the seven preceding years;
• resident only by virtue of the 120-day visitor limb above; or
• deemed resident under section 6(1A).

The first two catch people who assume a long absence has to be declared. Somebody who spends 182 days in India this year after seven sparse years is resident — and Not Ordinarily Resident, because those seven years total 729 days or fewer. They frequently expect the opposite.

What each status actually costs

That middle row is the reason the distinction matters. Between Ordinarily Resident and Not Ordinarily Resident sits the whole of a person's foreign income and the whole of the Schedule FA obligation — and with it the Black Money Act exposure that follows from leaving a foreign asset out.

Where it goes wrong in practice

• Counting from memory. Day counts are a question of evidence. Passport stamps, boarding passes and immigration records are what establish them, and a reconstruction made after a notice is the version that loses.
• Forgetting the arrival and departure days. Two days a trip, across several trips, is how a year lands on 181 instead of 184.
• Applying last year's answer. Status is decided separately for every year. The seven-year and ten-year tests mean it can change with no change in circumstances at all.
• Treating 182 as universal. It is the first limb for everyone and the second limb for some. For a high-income visitor the second limb is 120.
• Stopping at "resident". Whether that resident is Ordinarily Resident is a second question, and usually the more valuable one.
• Ignoring the treaty. Section 6 decides status under Indian law. Where two countries both claim a person, the tie-breaker in the residence article of the relevant treaty decides which one gives way, and that is a separate enquiry from this one.

A note on numbering

The provisions above carry the numbering of the Income-tax Act, 1961, which is what applies to the years this note and the calculator deal with. The Income-tax Act, 2025 renumbers, so check the reference against the year in front of you before citing it.

References

• Section 6, Income-tax Act, 1961, including Explanation 1 and its proviso, section 6(1A) and section 6(6).
• Finance Act, 2020, which introduced the 120-day limb and deemed residence.

Our work on residential status, DTAA positions and remittance is set out under international taxation.

General information on how section 6 is structured, not advice on a particular year. Status turns on facts and on evidence, and a treaty can displace the answer entirely. Take advice before relying on it.