Tax, GST and company law glossary

Residential Status

Your tax status as resident, resident but not ordinarily resident, or non-resident, which decides what income India can tax.

In short

Broadly, you are resident if you stay in India 182 days or more in the year, or 60 days plus 365 days in the four years before, subject to exceptions for citizens and visitors.

What it means

Residential status decides how much of your income India can tax. It is worked out separately for each tax year based mainly on the days you spend in India. There are three categories: Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RNOR) and Non-Resident (NR). It has nothing to do with citizenship or passport.

How it works

An individual is resident in a year if either test is met:

  • Stay in India of 182 days or more in the year, or

  • Stay of 60 days or more in the year plus 365 days or more in the four preceding years.

Exceptions and special rules:

  • For an Indian citizen leaving India for employment, or as ship crew, the 60 days is replaced by 182 days.

  • For an Indian citizen or person of Indian origin visiting India, the 60 days is replaced by 182 days, but by 120 days if Indian income (other than foreign sources) exceeds ₹15 lakh. Such a person, if resident, is RNOR.

  • An Indian citizen with Indian income above ₹15 lakh who is not liable to tax in any other country is deemed resident (RNOR).

  • A resident is RNOR if non-resident in 9 of the 10 preceding years, or in India for 729 days or less in the 7 preceding years.

An ROR is taxed on worldwide income. An RNOR or NR is generally taxed only on income earned or received in India.

Example

Rahul, an Indian citizen, works in Dubai. In tax year 2026-27 he spends 100 days in India and has Indian income (rent and FD interest) of ₹8,00,000.

  1. Basic test: 100 days is less than 182 days.

  2. He is a visiting citizen with Indian income below ₹15 lakh, so the 60-day test is replaced by 182 days. 100 days fails this too.

  3. Result: non-resident. Only his ₹8,00,000 Indian income is taxable; his Dubai salary is not.

If his Indian income were ₹18,00,000, he would still fail the 120-day test, but since the UAE does not tax his income, he may be deemed resident as RNOR. Even then, his Dubai salary stays outside Indian tax.

Key points to remember

  • Count days carefully from passport stamps; both arrival and departure days are usually counted.

  • Inform banks of NR status and convert savings accounts to NRO accounts.

  • Residents must report foreign assets and income in their return; missing this can attract heavy penalties under the Black Money Act.

  • DTAA relief may apply if you are taxed in two countries.

Income Tax

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