Who is an NRI for Indian income tax? Residential status explained

Residential status for income tax is worked out afresh every year, from 1 April to 31 March. It is separate from status under foreign exchange law (FEMA), which governs bank accounts and investments. A person can be a non-resident for FEMA purposes and still be resident for income tax, or the other way round, so both should be checked.

The basic tests

An individual is resident in India for a year if either of the following is true:

• They were in India for 182 days or more during the year, or
• They were in India for 60 days or more during the year and 365 days or more in total during the four preceding years.

Anyone who meets neither test is non-resident. Days are counted from passport stamps or travel records; the day of arrival and the day of departure are both usually counted as days in India.

Exceptions to the 60-day test

The 60-day test does not apply, and 182 days is used instead, for two groups:

• Indian citizens who leave India during the year for employment abroad, or as crew of an Indian ship
• Indian citizens and persons of Indian origin who live abroad and come on a visit to India, if their Indian income, excluding foreign sources, is ₹15 lakh or less

If a visiting Indian citizen or person of Indian origin has Indian income above ₹15 lakh, the 60 days is replaced by 120 days. They become resident if they stay 120 days or more in the year and 365 days or more in the four preceding years. Someone who becomes resident only through this 120-day rule is treated as Resident but Not Ordinarily Resident.

Deemed residency

An Indian citizen whose Indian income exceeds ₹15 lakh, and who is not liable to tax in any other country by reason of domicile or residence, is deemed to be resident in India, regardless of days of stay. This rule targets people who avoid residency everywhere. A deemed resident is also treated as Not Ordinarily Resident.

RNOR: the status that matters for returning Indians

A resident is further classified as either ordinarily resident or not ordinarily resident (RNOR). An RNOR is taxed in India on Indian income and on foreign income only if it comes from a business controlled in, or a profession set up in, India. Other foreign income, such as salary earned abroad before return, interest on foreign deposits and foreign rent, is not taxed in India during RNOR years.

A resident individual is RNOR if either of the following applies:

• They were non-resident in nine out of the ten preceding years, or
• They were in India for 729 days or less in total during the seven preceding years.

For someone returning after a decade abroad, this usually means one to three years of RNOR status, which is valuable time to reorganise foreign assets before full residency begins.

Worked example

Anita, an Indian citizen working in Dubai since 2014, visits Mumbai each year. Her only Indian income is rent and NRO interest of about ₹6 lakh a year.

If Anita's Indian income had been above ₹15 lakh, her 140 days in 2025-26 would have crossed the 120-day threshold and, with 365 days in the preceding four years, she would have been resident (RNOR) for that year.

Why it matters

Status decides what is taxed, which return form is used, whether foreign assets must be reported, and whether treaty relief is available. Getting it wrong in either direction is costly: a missed residency can mean undeclared foreign income, and an assumed residency can mean paying Indian tax on income that was not taxable here. For anyone near the thresholds, keeping an accurate day count through the year is the simplest protection.

This article is general information based on the law as understood on 19 October 2026. Rules, thresholds and form numbers change, and the facts of each case matter. It is not professional advice.