Two people can earn the exact same salary in the exact same city and owe completely different amounts of Indian tax. The difference usually isn’t income. It’s how many days they spent in India — and when.
We spent the last article establishing that your residential status decides how much of your income India can tax under Section 5. This one answers the question that actually determines that status: Section 6 of the Income Tax Act, 2025, the residential status test for individuals. It sounds procedural. In practice, it’s the single most consequential section for anyone who splits their year between India and abroad — NRIs, returning expats, frequent business travellers, even people who simply took a long sabbatical.
Applicability note: Section 6 of the 2025 Act applies to tax years beginning on or after 1 April 2026. The Income Tax Department has confirmed the basic day-count conditions are identical to Section 6 of the 1961 Act — this is a renumbering exercise, not a policy change.
Residential Status Under Section 6: The Two Basic Tests
Strip away every exception for a moment, and Section 6 boils down to counting days. An individual becomes a resident of India in a Tax Year if either of these is true:
Test A — The 182-Day Rule
In India for 182 days or more
In the current Tax Year alone. This one applies to everybody, no exceptions.
Test B — The 60 + 365 Rule
60 days this year + 365 days over 4 prior years
Catches people who visit repeatedly without crossing 182 days in any single year.
Meet either test, and you’re a resident for that Tax Year — full stop. Miss both, and you’re a Non-Resident, taxed only on income received or accruing in India, exactly as we covered under Section 5. The Income Tax Department has explicitly confirmed these day counts carry over unchanged from the 1961 Act; what’s shifted is the label around them, “Tax Year” instead of “previous year,” not the arithmetic.
Residential Status Rules for Indian Citizens & PIOs Visiting India
Test B exists to catch people quietly building up Indian ties over several years. But it would unfairly trap two groups who genuinely live abroad, so the Act carves out relief for them:
- Indian citizens leaving India for employment, or as crew on an Indian ship — Test B doesn’t apply to them at all in the year they leave. Only the 182-day test matters, so a short visit home doesn’t accidentally tip them into Indian residency.
- Indian citizens or Persons of Indian Origin (PIOs) visiting India — Test B’s 60-day threshold is relaxed too, but the size of the relaxation depends on income. Where total income, other than income from foreign sources, is up to ₹15 lakh, the 60-day condition is effectively replaced by 182 days, which means Test B stops mattering and only the headline 182-day rule counts. Where it exceeds ₹15 lakh, the threshold becomes 120 days instead of 60.
| Category | Total Income (Excl. Foreign Sources) | Effective Day Threshold |
|---|---|---|
| Ordinary resident individual | Any | 182 days, or 60 + 365 |
| Citizen leaving for employment/crew duty | Any | 182 days only |
| Visiting citizen/PIO | Up to ₹15 lakh | 182 days only |
| Visiting citizen/PIO | Exceeds ₹15 lakh | 120 days + 365 (preceding 4 years) |
Deemed Resident Under Section 6: The ₹15 Lakh Rule
This is the provision that gets the most attention, and for good reason — it was designed specifically to close a loophole certain high-income Indians were using: living somewhere with no personal income tax, like the UAE, while barely stepping foot in India, and ending up tax-resident nowhere at all.
Under Section 6(7), an Indian citizen whose total income, other than income from foreign sources, exceeds ₹15 lakh in a Tax Year, and who isn’t liable to tax in any other country or territory by reason of domicile, residence, or similar criteria, is deemed a resident of India, regardless of how many days they actually spent here. Crucially, this deemed residency doesn’t make them a full Ordinarily Resident — they’re automatically classified Resident but Not Ordinarily Resident (RNOR), so their genuinely foreign income still stays out of India’s net.
Arjun is an Indian citizen who has lived and worked in Dubai for eight years, visiting India for barely three weeks a year. He earns no salary from any Indian employer, but he owns two rental properties in Bengaluru that generate ₹18 lakh a year. Assume Arjun is not liable to tax in any other country or territory by reason of domicile, residence, or similar criteria. Because his total income, other than income from foreign sources, exceeds ₹15 lakh, Section 6(7) deems him a resident of India for that Tax Year, even though his day count would otherwise make him a clear non-resident. His Dubai earnings stay untouched by Indian tax, since he’s classified RNOR, but his Bengaluru rental income was always taxable in India anyway, deemed-resident status or not.
Resident but Not Ordinarily Resident (RNOR) vs ROR Under Section 6
Passing the residency test only answers half the question. The next question — arguably the more important one for a returning NRI — is whether you’re a full Ordinarily Resident or the softer Not Ordinarily Resident category. This matters enormously, because RNOR status shields your foreign income from Indian tax almost as effectively as non-resident status does.
The Act frames this test from the RNOR side. You’re Not Ordinarily Resident (RNOR) if either of these is true:
- You were non-resident in India in 9 out of the preceding 10 Tax Years, or
- You were in India for 729 days or less during the preceding 7 Tax Years.
Only if neither of these applies — meaning you were resident in at least 2 of the preceding 10 Tax Years, and you were in India for 730 days or more across the preceding 7 Tax Years — do you qualify as a full Ordinarily Resident (ROR), taxed on your global income. Fail either condition, and you’re RNOR instead — taxed on Indian income in full, but with foreign income staying outside India’s reach unless it comes from a business you control or a profession you’ve set up here. A returning NRI may remain RNOR for one or more Tax Years, depending on their residential history and cumulative stay in India during the relevant preceding periods.
- Assuming residency is decided once and stays fixed — it isn’t. Section 6 is applied fresh every single Tax Year, based on that year’s day count and the rolling look-back windows
- Confusing “resident” with “taxed on everything” — a resident who’s also RNOR still gets meaningful foreign-income protection; residency and ROR status are two separate questions
- Keep a precise record of your travel dates — even a one-day difference can affect whether a statutory threshold like 182 days or 60 days is crossed, so don’t rely on memory when the count is close
- Planning a return to India without checking the RNOR conditions — your residential history and cumulative stay in India can determine whether you qualify as RNOR
Frequently Asked Questions
How many days can an NRI stay in India without becoming a resident?
Generally, up to 181 days in a Tax Year, provided the 60+365 day test also isn’t triggered. Visiting citizens and PIOs get that 60-day threshold relaxed to 182 days if their total income, other than income from foreign sources, is up to ₹15 lakh, or 120 days if it exceeds ₹15 lakh — so the safe number depends heavily on income level, not just days in India.
What is RNOR status and why does it matter?
Resident but Not Ordinarily Resident is a middle category between full resident and non-resident. An RNOR is taxed on Indian income in full but keeps most foreign income outside India’s tax net — making it a genuinely valuable, temporary shelter for anyone returning to India after several years abroad.
Does the ₹15 lakh deemed resident rule apply to all NRIs?
No. It applies only to Indian citizens whose total income, other than income from foreign sources, exceeds ₹15 lakh in the Tax Year and who aren’t liable to tax in any other country or territory by reason of domicile, residence, or similar criteria. It’s a targeted anti-abuse provision, aimed at citizens who’d otherwise be tax-resident nowhere in the world.
Have the day-count thresholds under Section 6 changed under the 2025 Act?
No. The Income Tax Department has confirmed the basic conditions, 182 days, or 60 days plus 365 days over the preceding four years, are identical to Section 6 of the 1961 Act. The deemed-resident provision has moved from Section 6(1A) to Section 6(7), but the substance is unchanged.
Can I be resident for one type of income and non-resident for another?
No. Residential status applies to the person as a whole for that Tax Year, not separately to each income source. If you’re resident, you’re resident for every source of income you have, though how much of each source is actually taxable still depends on the ROR/RNOR/non-resident scope rules under Section 5.
Income Tax Act 2025 — Chapter I to III Series
Income Tax Act 2025: Tax Year, Previous Year & AY Explained
One term instead of two, and a consolidated definitions clause.
Part 2Charge of Income-tax & Scope of Total Income (§4–5)
Who’s taxed, on what, and how residential status decides the scope.
Residential Status of Individuals Under Section 6
The day-count tests that decide which category you fall into.
Residential Status of HUF, Firms, Companies & Other Entities
How Section 6 applies beyond individuals.
Residential status isn’t something you discover while filing your return in July. It’s decided by your travel calendar as the Tax Year unfolds, which means the only time you can actually plan around it is before 31 March, not after. If you’re anywhere close to a threshold, whether it’s 182 days, the ₹15 lakh mark, or the edge of your RNOR window, a few days’ difference in travel timing can genuinely change your tax outcome.
Sources & References
- Income Tax India — Section 6, Residence in India (full text)Income Tax India, incometaxindia.gov.in
- Income Tax Department — Non-Resident: Residential Status FAQsIncome Tax Department, Government of India
- Income Tax Department — Non-Resident FAQs (deemed residency, ₹15 lakh rule)Income Tax Department, Government of India
- Income-tax Act, 2025 [Act No. 30 of 2025] — full text, as amended by Finance Act, 2026Income Tax India, incometaxindia.gov.in
Section 6 discussed in this article is summarised for reader convenience. Residential status determinations, especially deemed residency and RNOR eligibility, are fact-specific — always verify against the official text linked above and consult a Chartered Accountant before relying on this for a filing position.
Disclaimer: This article is for general informational purposes only and does not constitute tax or legal advice. The Income-tax Act, 2025 and related rules are subject to notifications and amendments by the CBDT. Please consult a qualified Chartered Accountant for advice specific to your situation.
