Tax Residency in India: NRI, RNOR or Resident? (2026-27)

Your tax residency in India is decided afresh every tax year (April to March), purely by how many days you spent in India and, in some cases, how much Indian income you have. Citizenship, the type of visa and where your family lives do not decide it. As of October 2026, the tests sit in Section 6 of the Income-tax Act, 2025, and they work the same way as they did under the 1961 Act.

Why status matters

Your status decides how much of your worldwide income India can tax.

An NR does not pay Indian tax on a foreign salary or a US brokerage account. An ROR does, subject to relief under a tax treaty (DTAA). That is why the day count is worth tracking carefully.

Step 1: Are you resident at all?

Under Section 6(2) of the Income-tax Act, 2025, an individual is resident in a tax year if either test is met:

1. 182-day test: in India for 182 days or more in that tax year, or
2. 60 + 365 test: in India for 60 days or more in that tax year and 365 days or more in total in the four preceding tax years.

If neither applies, you are a non-resident. The 60-day limb has important exceptions.

The exceptions to the 60-day test

• Indian citizens leaving India for employment abroad, or as crew of an Indian ship, in that year: the 60 days is replaced by 182 days. In effect, only the 182-day test applies.
• Indian citizens and persons of Indian origin visiting India (who live abroad): the 60 days is replaced by 182 days, unless their total income other than income from foreign sources exceeds ₹15 lakh. In that case the 60 days becomes 120 days.

A person who becomes resident only through the 120-day route is treated as RNOR, not ROR.

Deemed residency

An Indian citizen whose income other than foreign-source income exceeds ₹15 lakh, and who is not liable to tax in any other country because of domicile, residence or similar criteria, is deemed resident even with very few days in India. This targets people who move between low-tax or no-tax countries. A deemed resident is treated as RNOR.

Step 2: If resident, are you "ordinarily" resident?

A resident individual is RNOR (not ordinarily resident) if any of these apply:

• Non-resident in India in 9 out of the 10 preceding tax years, or
• In India for 729 days or less in total during the 7 preceding tax years, or
• Resident only through the 120-day route above, or
• A deemed resident.

Everyone else who is resident is ROR. The first two conditions come from the long-standing rules; the 2025 Act retained the framework, though you should confirm the exact sub-clause wording on the Income Tax Department's website if your case is borderline.

For a returning NRI, RNOR status often lasts two to three tax years after coming back. That window is valuable: foreign income earned in it largely stays outside Indian tax.

Worked examples

All three are for tax year 2026-27 (1 April 2026 to 31 March 2027). Day counts are illustrative.

Ravi: He spent 130 days in India, which is more than 120, and 400 days in the previous four years, which is more than 365. With Indian income of ₹18 lakh, the 120-day rule applies. He becomes resident, but because it is through the 120-day route, he is RNOR. His Dubai salary is not taxed in India. His Indian rent and interest are.

Meera: Same days, but her Indian income is ₹9 lakh, so the visiting exception replaces 60 with 182 days. At 130 days she is a non-resident.

Arjun: At 250 days he is clearly resident. He was non-resident for the previous ten years, so he qualifies as RNOR. His US savings interest earned after returning is not taxed in India while he remains RNOR, but any Indian salary is.

How to count days

• Count every day you were physically in India, including part days. The cautious approach is to count both the arrival and departure days.
• Track by tax year (1 April to 31 March), not by calendar year.
• Keep passport stamps, e-gate records, boarding passes and the immigration records you can request. If your status is questioned, the burden of proof is on you.
• A day-count error of even one day can flip the result when you are near 120 or 182.

Practical consequences

Bank accounts. Once you become a non-resident under FEMA, resident savings accounts should be converted to NRO, and you can open NRE and FCNR accounts. FEMA residency uses a different test from income tax, based on your intention and the purpose of your stay. Our guide to NRE vs NRO vs FCNR accounts explains the account choices.

TDS. Banks and buyers of property deduct higher TDS for non-residents. Interest on NRO accounts suffers TDS at 30% plus surcharge and cess, while NRE interest is exempt for NRIs. If your actual tax is lower, you claim the excess back in your return.

Return filing. Residents and RNORs choose their status in the ITR. Residents (ROR) must report foreign assets in Schedule FA even if they produce no income. An NR or RNOR does not.

Tax treaties. If you are resident in both India and another country under their domestic laws, the DTAA tie-breaker rules (permanent home, centre of vital interests, habitual abode, nationality) decide where you are treated as resident for treaty purposes. To claim treaty benefits in India, you typically need a Tax Residency Certificate from the other country and Form 10F.

Slabs. Non-residents use the same slabs as residents but cannot claim the rebate that makes income up to ₹12 lakh tax-free under the new regime (Section 156, old Section 87A), because the rebate is available only to resident individuals. See income tax slabs for FY 2026-27 and estimate your bill with the income tax calculator.

Common mistakes

• Assuming that holding an Indian passport makes you resident. It does not; only days and income decide.
• Ignoring the ₹15 lakh Indian income threshold when you have large rent or capital gains in India.
• Counting days by calendar year instead of April to March.
• Treating FEMA status and income-tax status as the same. They often differ in the year you move.
• Forgetting that RNOR status is temporary. Once you become ROR, global income and Schedule FA reporting apply.

Key takeaways

• As of October 2026, residency is tested each tax year under Section 6 of the Income-tax Act, 2025, with the same tests as before.
• You are resident if you spend 182 days in India, or 60 days plus 365 days over the previous four years. Visiting Indian citizens and leavers for employment effectively face 182 days.
• If Indian income (excluding foreign sources) exceeds ₹15 lakh, 120 days can make a visiting citizen resident, but only as RNOR.
• Deemed residents and returning NRIs often qualify as RNOR, which keeps most foreign income outside Indian tax for a limited period.
• Keep evidence of every entry and exit. A one-day error near 120 or 182 days can change your tax bill.