Indian tax residency — the 2026 day-count rules and transitions

Whether India can tax a particular stream of your income turns on a single question — what is your Indian residential status for the financial year? The answer is set by Section 6 of the Income Tax Act, 1961, runs on day-count in India (with a few modifications for citizenship and Indian-source-income level), and changes each financial year. The three possible outcomes — Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RNOR) and Non-Resident (NRI) — produce sharply different tax exposures. This page is the 2026 residential-status framework — the rules, the 2020 amendments that tightened it, the RNOR transition window that matters for returning NRIs, and the interactions with FEMA and DTAA.

Why this matters

Tax liability in India follows residential status:

ROR: taxable on worldwide income and reportable on worldwide assets (Schedule FA).
RNOR: taxable on Indian-source income and income from business controlled in India / profession set up in India; foreign income exempt; foreign assets generally not reportable.
NRI (Non-Resident): taxable on Indian-source income only.

A single year's status can move an NRI from zero Indian tax on foreign salary to a 30%+ Indian tax on the same salary — or, with careful planning on the return year, preserve the RNOR transition window for two or three years of foreign income outside the Indian net.

The basic rules — Section 6(1)

An individual is resident in India for a financial year (FY = April 1 to March 31) if either test is met:

Test A — the 182-day test

182 or more days in India during the FY, without reference to any preceding year.

Test B — the 60-day / 365-day combined test

60 or more days in India during the FY, AND 365 or more days in India across the four preceding FYs.

Both tests look at day-count only; continuity does not matter. You can be in India for six non-contiguous chunks totalling 182 days and still be resident under Test A.

Modifications for Indian citizens and PIOs

Two relaxations apply in favour of Indians going abroad or visiting India:

Indian citizen leaving India for employment abroad in a FY — Test B's 60-day threshold is raised to 182 days. A first-year emigrant who spends under 182 days in India thus escapes Indian resident status.
Indian citizen or Person of Indian Origin (PIO) visiting India — Test B's 60-day threshold is raised to 182 days if their Indian-source income is ₹15 lakh or less.

The 120-day tightening — 2020 amendment

For the visitor carve-out, the Finance Act 2020 added a condition:

Indian citizen or PIO visiting India whose Indian-source income exceeds ₹15 lakh in the FY — Test B's 60-day threshold rises only to 120 days (not 182). The carve-out is narrower for higher- income visitors.

Below ₹15 lakh Indian income, the visitor threshold stays at 182. Above ₹15 lakh, the 120-day cap applies.

Summary of thresholds

Profile	Day threshold to become resident
Ordinary resident / foreign citizen visiting	182 days (Test A) or 60 days + 365-in-4-years (Test B)
Indian citizen going abroad for employment (emigrating in the FY)	182 days (both tests effectively merge at 182)
Indian citizen / PIO visiting India, Indian income ≤ ₹15 lakh	182 days (both tests)
Indian citizen / PIO visiting India, Indian income > ₹15 lakh	182 days (Test A) or 120 days + 365-in-4-years (Test B)

The deemed resident rule — Section 6(1A)

Also introduced by Finance Act 2020, effective FY 2020–21 onwards:

An Indian citizen whose Indian-source income exceeds ₹15 lakh in the FY and who is not liable to tax in any other country by reason of domicile, residence or any similar criterion — is deemed resident in India for that FY, regardless of day-count.

What it targets

The "stateless" tax resident — an Indian citizen who parked themselves in a zero-tax jurisdiction (UAE, Bahamas, Cayman) and paid tax nowhere on their worldwide income.

Effect

A deemed resident is classified as RNOR (not ROR) — so foreign-source income not derived from business controlled in India or profession set up in India remains outside Indian tax. The provision therefore acts as an anti-abuse measure catching the India-source portion, not extending worldwide taxation.

What it does NOT target

Legitimate residents of countries that tax their residents (US, UK, Canada, Australia, most European countries, Singapore, etc.) — these NRIs / OCIs / foreigners continue to be taxed under the basic day-count rules.

Ordinarily Resident vs Not Ordinarily Resident —

Section 6(6)

Once you are resident under Section 6(1), the further question is whether you are Ordinarily Resident (ROR) or Not Ordinarily Resident (RNOR).

You are RNOR if either of:

You were non-resident in 9 out of the 10 preceding FYs; OR
You were in India for 729 days or less across the 7 preceding FYs.

(Either condition alone is sufficient for RNOR status.)

If both conditions fail — that is, you were resident in 2+ of the preceding 10 FYs AND in India for 730+ days across the preceding 7 FYs — you are ROR.

Additional RNOR category under Section 6(6) carves out Indian citizens whose Indian income exceeds ₹15 lakh and who have stayed in India 120+ but < 182 days and are residents under Section 6 — they are classified RNOR regardless of the above tests.

Effect in practice

A long-absent NRI returning to India typically meets at least one of the RNOR conditions for the first 2 to 3 FYs after return.
Thereafter they become ROR and foreign income enters the Indian tax net.

The returning-NRI RNOR window

The most valuable residential-status opportunity is the 2-to-3-year RNOR window after return to India.

Why it's valuable

During RNOR, only Indian-source income and business- controlled-in-India income is Indian-taxable. Foreign salary, foreign pension, foreign rent, foreign dividends, foreign capital gains — all remain outside the Indian net.

How long it lasts

Depends on arrival date and prior history:

Long-absent NRI arriving in India on or after October 1 of a FY — that FY's day count is likely < 182, so the NRI remains non-resident for that FY. Year 1 post-arrival starts the residency clock — RNOR for that year and Year 2 at minimum. Three years of RNOR if the 730-days test in preceding 7 years keeps returning low.
Long-absent NRI arriving April 1 — day count hits 182 early; the whole FY becomes resident. Two years of RNOR is the typical outcome.
Frequent India visitor who returns for good — may have already exhausted the 730-day threshold in preceding 7 years; RNOR may apply for only one year, or not at all.

Timing the arrival

Arriving in the second half of the Indian FY (October–March) extends the RNOR window to three years in many cases. Families often plan a September / October arrival specifically for this reason — see returning to India for the broader return framework.

Worked examples

Example 1 — US-based NRI returning permanently

Raj was an NRI for 12 consecutive FYs (minimal India visits).
Arrives India 15 September 2025 for permanent settlement.
FY 2025–26: he is in India for 198 days (15 Sep to 31 March = ~198 days). He is resident under Test A.
RNOR check: he was NR in 9 of 10 preceding FYs (yes). RNOR for FY 2025–26.
FY 2026–27: full year in India = 365+ days. Resident under Test A. NR in 9 of 10 preceding (now 8 of 10 — borderline; actually was resident in 2025–26). 730-days test: 198 + 0 in the 7 preceding = 198 < 730; RNOR for FY 2026–27.
FY 2027–28: Now resident in 2 of preceding 10 (2025–26 and 2026–27). 730-days test: 198 + 365 = 563 days in the 7 preceding FYs — still < 730; RNOR for FY 2027–28.
FY 2028–29: resident in 3 of 10 preceding; 730-days test: 198 + 365 + 365 = 928 days > 730. Both RNOR conditions fail. ROR from FY 2028–29 onwards.

Three full years of RNOR (2025–26, 2026–27, 2027–28) with foreign-source income outside the Indian net. If Raj had arrived 1 April 2025 instead, he would have had full 365 days in the first FY and the 730-day test would have tipped into ROR one year earlier — two years of RNOR instead of three.

Example 2 — US citizen visiting India with

high Indian income

Priya is a US citizen (OCI holder) consultant with Indian-source consulting income of ₹50 lakh / year from Indian clients.
She spends 130 days in India in FY 2025–26 and 320 days across FYs 2021–22 to 2024–25 combined.
Test A: 130 < 182 — not resident under A.
Test B: 130 ≥ 120 days (applies because Indian income > ₹15 lakh), AND 320 days in preceding 4 FYs is < 365 — actually she's at 320 < 365, so Test B is NOT satisfied.
Result: Non-Resident for FY 2025–26.
If she had spent 340 days across the prior 4 years instead of 320, Test B would be satisfied at the 120-day threshold — she becomes Resident, and her full foreign income would be taxable as RNOR-or-ROR depending on the 10-year / 7-year tests.

Example 3 — The deemed-resident rule

Anil, Indian citizen, works in Dubai (UAE, which does not tax personal income).
Indian-source income: ₹25 lakh / year (Indian rental, Indian investments).
He spends 60 days in India per year.
Not resident under Test A (60 < 182) or Test B (60 + 365-in-4 combined with the 120-day rule — with Indian income > ₹15 lakh, he needs 120 days, so 60 < 120). So he passes the day-count tests.
But: Indian citizen, Indian income > ₹15 lakh, not liable to tax in any other country (UAE: no income tax on individuals). Deemed resident under Section 6(1A).
Classified as RNOR. Foreign-source income remains outside the Indian net (Dubai income, because it is not derived from Indian business controlled from India); Indian-source income is fully taxable.

FEMA residency — the separate regime

Indian tax residency under Section 6 decides what income India can tax. FEMA residency decides which bank accounts, investments, and transactions are legal.

The two regimes are distinct:

FEMA residency runs on intent and physical presence — on the day you leave India with intent to take up employment / business / stay abroad, you become FEMA- non-resident; on the day you return with intent to stay, you become FEMA-resident. No day-count arithmetic.
Tax residency runs on day-count alone.

Consequences:

A 182-day Indian-tax-resident can still be FEMA-non-resident if their visit is a temporary trip.
A returning NRI is FEMA-resident from day one of arrival (must redesignate NRE/NRO/FCNR accounts), but typically remains Indian-tax-resident as RNOR for 2–3 years.

For the FEMA-side bank-account consequences see NRI bank accounts and bank accounts when returning to India. For the return-to-India framework see returning to India.

Day-counting mechanics

Some operational points on counting days:

Arrival and departure days — both are counted as days in India under the standard practice. A 6-hour transit-hotel visit through Delhi is a day in India for Section 6 purposes.
Part-day rule — each calendar day physically in India counts as one day regardless of hours present.
Non-continuous days aggregate — six trips of 31 days each in a FY total 186 days; resident under Test A.
Travel evidence — passport stamps are the primary record. Keep a travel log contemporary with travel; retrofitting from stamps years later can be difficult.
International waters / transit — time in international airspace or waters is neither "in India" nor "abroad" for Section 6; most tax practitioners treat departure as the last day in India and arrival as the first day in India on each leg.

Tools

The Income Tax portal does not provide a day counter. Several online residency calculators and tax-advisory spreadsheets exist; use them as a planning aid, not authoritative.

DTAA tie-breaker — when you are resident in

both countries

An individual can be tax-resident in two countries simultaneously under each country's domestic rules — for example, an Indian citizen who spent 182 days in India and also meets the US substantial-presence test is a dual-resident.

The DTAA tie-breaker (Article 4 of most modern Indian treaties) resolves this:

Permanent home — resident of the country where they have a permanent home available.
If permanent homes in both (or neither) — centre of vital interests (personal and economic ties).
If unclear — habitual abode (where they physically live most).
If still unclear — nationality.
If still unclear — mutual agreement procedure between the two tax authorities.

The tie-breaker result applies for treaty purposes only — for domestic law purposes each country continues to treat the individual as resident, but the treaty allocates the taxing rights.

For the DTAA framework overall see DTAA and how it works.

The Tax Residency Certificate (TRC)

Where an NRI needs to invoke DTAA benefits in India (to reduce TDS on interest, dividends, pension, etc. from Indian payers), they need a TRC from the country of residence confirming they are tax-resident there.

US: Form 6166 from the IRS via Form 8802 (US$85 fee).
UK: HMRC Certificate of Residence, online application.
Canada: CRA Certificate of Residency.
Australia: ATO Certificate of Residency.
Most other countries: equivalent national tax-authority certification.

The TRC combines with PAN and electronic Form 10F (on incometax.gov.in) as the three-document stack invoking treaty rates. See NRI taxation in India for the downstream mechanics.

Common pitfalls

Confusing FEMA residency and tax residency. Different rules, different effects. Both matter, run on different axes.
Using the old 60-day visitor rule without checking Indian-income level. Post-2020, Indian-citizen / PIO visitors with Indian income > ₹15 lakh fall under the tightened 120-day rule.
Missing the deemed-resident rule. Indian citizens in zero-tax jurisdictions with

₹15 lakh Indian income are deemed resident even at zero day-count.
Counting days from arrival to departure as travel days. Both arrival and departure count as days in India.
Expecting RNOR to extend beyond the 10-year / 7-year tests. It can't. The status is fixed by the day-count in preceding years.
Planning a return on 1 April. The full FY goes into day-count; RNOR window shortens by a year versus a late-year arrival.
Assuming ROR-year foreign income can be claimed back. Once ROR, foreign income is fully in the Indian net for that year; timing should have been planned in the preceding window.
Failing to file Schedule FA on transition to ROR. Foreign-asset disclosure is mandatory for ROR; non-disclosure is a Black Money Act issue.
Relying on citizenship over residence. Indian tax runs on residence; citizenship affects specific variations (the 182-day visitor carve-out, the deemed-resident rule) but not the primary machinery.
Ignoring the DTAA tie-breaker when genuine dual residency exists.
Skipping the TRC or Form 10F on treaty- rate claims.

Checklist — determining your residential

status for the FY

Count days in India for the FY (April 1 to March 31).
Run Test A (182 days).
Run Test B with the right threshold:
- 60 days for non-Indian-origin foreigners and ordinary cases;
- 120 days for Indian citizen / PIO visitors with Indian income > ₹15 lakh;
- 182 days for Indian citizen emigrating for employment or visitor with Indian income ≤ ₹15 lakh.
Count days in preceding 4 FYs for the 365-day leg of Test B.
If resident, run the RNOR test — non-resident in 9 of preceding 10 FYs OR < 730 days in preceding 7 FYs.
**If Indian citizen, Indian income

₹15 lakh, and tax-resident nowhere**, apply the Section 6(1A) deemed-resident classification (RNOR).
Confirm which status — ROR, RNOR, or NR — applies.
For returning NRIs, project the RNOR window forward over 3–4 years using the same tests.
For dual-residency cases, apply the DTAA Article 4 tie-breaker.
Keep a day-count log with flight receipts, passport stamps, and Indian entry-exit confirmations.

Summary

Indian tax residency under Section 6 runs on day-count in the FY (and preceding years), with modifications for Indian-citizen emigrants and Indian citizen / PIO visitors.
Test A: 182 days in the FY.
Test B: 60 days (or 120 / 182 depending on citizenship and income) plus 365 days across the preceding 4 FYs.
Section 6(1A) deemed-resident rule catches Indian citizens with > ₹15 lakh Indian income who are not tax-resident anywhere else — classified as RNOR.
Ordinarily Resident requires residency in 2+ of the preceding 10 FYs AND 730+ days in the preceding 7 FYs; otherwise RNOR.
ROR: worldwide income taxable. RNOR: Indian-source + Indian-business income taxable; foreign income exempt. NRI: Indian-source only.
FEMA residency is a separate regime (intent + physical presence, no day count). Both must be tracked.
Returning NRIs typically enjoy 2–3 years of RNOR after return, best preserved by arriving in the second half of the FY.
TRC + electronic Form 10F + PAN are required to invoke DTAA treaty rates.

For the broader NRI taxation framework, see NRI taxation in India. For DTAA mechanics, see DTAA and how it works. For the specific India-US pension DTAA, see Indian pension and the US DTAA. For the return-to-India framework covering banking and customs alongside tax, see returning to India and bank accounts on return.