In India, your residential status determines whether your global income or only Indian income is taxable.
It is based not on citizenship or visa, but on the number of days you spend in India during a financial year.
Understanding this is essential for salaried individuals, NRIs, business owners, and expats.
This blog explains who is considered a resident under Indian income tax law for FY 2024-25.
Legal Reference
- Section 6, Income Tax Act, 1961
- CBDT Circulars on NRI and residency rules
- Updated provisions under the Finance Act, 2020
Who is Considered a Resident in India?
A person is considered Resident in India if any one of the following conditions is met:
- Stayed in India for 182 days or more during the financial year, OR
- Stayed for 60 days or more in the financial year and 365 days or more in the preceding 4 years
Special Cases for Indian Citizens and PIOs
For Indian citizens or Persons of Indian Origin (PIOs) visiting India, the second condition changes:
- The 60-day threshold is extended to 182 days
- Exception: If total income (excluding foreign income) exceeds ₹15 lakh:
- 60-day rule applies, and you become resident if stay is 120 days or more
Resident but Not Ordinarily Resident (RNOR)
A person is Resident but Not Ordinarily Resident (RNOR) if:
- They have been a non-resident in 9 out of 10 previous years, or
- Have been in India for ≤729 days in the last 7 years
RNORs are taxed only on Indian income and foreign income derived from a business controlled in India
Non-Resident (NRI)
You are considered a Non-Resident (NRI) if:
- You do not satisfy any of the resident conditions under Section 6
- Only income earned or received in India is taxable
- Foreign income is not taxed, but must be disclosed in Schedule FA if you file ITR
Example Scenarios
- Example 1: Rohan stayed in India for 220 days in FY 2024-25
- Resident (exceeds 182 days)
- Example 2: Meera is an NRI with ₹18 lakh Indian income, stayed 130 days in India
- Resident (Indian income > ₹15 lakh and stay > 120 days)
- Example 3: Arjun visits India for 100 days, with ₹10 lakh Indian income
- Non-Resident (stay < 182 and < ₹15 lakh income)
Why Residential Status Matters
- Residents are taxed on global income
- NRIs are taxed only on Indian income
- RNORs have limited tax liability on foreign income
- Determines applicability of:
- Section 10 exemptions
- TDS on NRO accounts
- Disclosure of foreign assets
- Tax relief under DTAA
Documents to Track Your Status
- Passport with travel stamp pages
- Visa or employment records
- Bank account statements showing location of deposits
- Copy of income sources (Indian and foreign)
Conclusion
Your taxability in India depends first on your residency status. With stricter rules for high-income NRIs and global disclosures, it’s critical to track your days in India and understand the tax consequences well in advance.
Call to Action
Uncertain if you qualify as a Resident, RNOR, or NRI this year?
Even a small change in days stayed in India can affect your global tax exposure.
Schedule a consultation with Anshul Goyal, Chartered Accountant, to get a precise residential status calculation and tax strategy.
Visit: https://calendly.com/anshulcpa
Disclaimer
This article is for general awareness and should not be considered legal or tax advice.
Residential status depends on actual stay, income type, and judicial interpretations.
Anshul Goyal is a Chartered Accountant licensed with ICAI, India.
Consult a qualified professional to determine your exact status and compliance requirements.
Frequently Asked Questions
1. Can an NRI become a resident in just one year?
Yes, if they stay ≥182 days or meet the 120-day rule with ₹15 lakh income.
2. What is the benefit of RNOR status?
Limited tax liability — foreign income not taxed unless controlled from India.
3. Do I need to file ITR if I am a Non-Resident?
Only if you earn taxable income in India (rent, interest, capital gains, etc.)
4. Is the 182-day rule applicable for every person?
It varies for Indian citizens/PIOs based on income and travel history.
5. Can I switch between Resident and NRI year-to-year?
Yes, residential status is evaluated every financial year separately.