Residential Status

Section 6(1) lays out two basic conditions for becoming a resident: (a) physical stay of 182 days or more in India during the current financial year, OR (b) stay of 60 days or more in the current year AND 365 days or more in the four preceding years combined. The 60-day threshold is relaxed to 182 days for Indian citizens or PIOs visiting India, and for Indian citizens leaving for employment abroad. If neither basic condition is satisfied, you're a non-resident (NRI) for that year. Always count departure and arrival days as part of stay; passport stamps and immigration records are the gold standard during scrutiny.

Once you're a resident, you split into Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR). RNOR conditions: either you've been a non-resident in 9 of the 10 preceding years, OR your stay in India in the 7 preceding years is 729 days or less. Fail both, you're ROR. The tax distinction matters: ROR is taxed on global income, while RNOR is taxed only on Indian-source income and foreign income from a business controlled in India or profession set up in India. RNOR status is a useful 2-3 year transition window for returning NRIs to organise foreign assets without triggering Indian tax.

Both the day of arrival and the day of departure are counted as days of stay in India, regardless of how many hours you actually spent. So a flight landing at 11:55 PM on 10 March still adds 10 March as a full Indian day. This is settled by judicial precedent and consistent CBDT practice. For frequent travellers, every short visit adds 2 days minimum (in + out), which can quickly stack up. Maintain a detailed calendar with passport stamp dates, boarding pass screenshots, e-visa printouts and immigration entry/exit records. Many residency disputes turn on a few borderline days, especially around the 182-day threshold.

Yes. Section 6(1A) inserted from FY 2020-21 introduced the deemed residency rule: an Indian citizen with total Indian-source income exceeding Rs 15 lakh in a financial year, who is not liable to tax in any other country by reason of domicile, residence or similar criteria, is deemed a resident of India regardless of physical days. Such a person is treated as RNOR by default, so foreign income outside Indian-controlled business isn't taxed. The rule targets stateless tax residents and high-income Indian citizens parked in zero-tax jurisdictions. Check the tax-liability-elsewhere condition carefully; it has nuances around treaty residency and minimum tax obligations.

Yes, under Section 6(1A) deemed residency. If you're an Indian citizen earning more than Rs 15 lakh of Indian-source income during the financial year, and you're not liable to tax in any other country (whether by domicile, residence or other criterion), you become a deemed resident even with zero physical days in India. The status is automatically RNOR, so global income isn't directly taxed, but Indian income and Indian-controlled business income are. This was specifically introduced to plug the loophole used by some HNIs settling in tax havens. UAE residents fell under scrutiny initially; subsequent CBDT clarifications calibrated the application.

An RNOR taxpayer is taxed in India only on: income received or deemed received in India, income accruing or arising in India, and foreign income that is derived from a business controlled in India or a profession set up in India. So a salary deposited directly to an overseas bank account (truly earned and received abroad) is generally outside the RNOR net, but salary earned for services rendered in India or a foreign consulting fee from a profession headquartered in India is taxable. Pure foreign-source dividends, interest, capital gains, rent and salary that don't have these India-link triggers escape Indian tax during the RNOR years.

For the 60-day rule under Section 6(1)(c), aggregate your physical stay in India across the four financial years immediately preceding the current FY. If the total reaches 365 days or more, the second basic condition is satisfied (combined with 60+ days in the current year). For the RNOR test under Section 6(6), aggregate stay across the seven financial years immediately preceding the current FY. If the total is 729 days or less, you qualify as RNOR. Maintain a year-by-year stay sheet from your passport: it's essential for substantiating status if the assessing officer raises queries during scrutiny, especially in the year of return to India.