Your residential status decides what India can tax: everything you earn worldwide, or only your Indian income. With the Income-tax Act, 2025 in force from 1 April 2026, many NRIs are asking whether the day-count rules changed. Short answer: they did not. Here are the tests as they stand for tax year 2026-27, and the RNOR window that returning NRIs should plan around.
First, the news: nothing changed
The new Act replaced "previous year" and "assessment year" with a single "tax year" and renumbered most of the law — but residential status stayed put, in both substance and section number. It sits in Section 6 of the 2025 Act, exactly as it did in the 1961 Act. The 182-day rule, the 120-day tweak for higher-income visitors, deemed residency and the RNOR categories were all carried over unchanged. If you knew the rules last year, you know them this year.
Why status decides everything
India taxes by status, not citizenship:
- Non-resident (NRI): taxed only on income received or arising in India — rent from an Indian flat, interest on NRO deposits, capital gains on Indian assets.
- Resident and Ordinarily Resident (ROR): taxed on worldwide income, with foreign-asset reporting obligations.
- Resident but Not Ordinarily Resident (RNOR): the in-between. Indian income is taxed; most foreign income is not.
The difference between landing in RNOR and ROR in a transition year can be the difference between your overseas salary, pension and investment income staying out of Indian tax — or all of it coming in.
The day-count tests
The basic rule
You are a resident for a tax year if either:
- you are in India for 182 days or more in the year, or
- you are in India for 60 days or more in the year and 365 days or more across the preceding four years.
Fail both and you are a non-resident. Count days carefully — the day of arrival and departure both generally count as days in India.
The concession for NRIs visiting India
For an Indian citizen leaving for employment (or as crew), and for an NRI or PIO visiting India, the 60-day limb is relaxed to 182 days — meaning the simple question is whether you crossed 182 days.
The 120-day test for higher incomes
There is one carve-out within the concession. A visiting NRI or PIO whose India-sourced income exceeds ₹15 lakh gets a tighter threshold: 120 days. Stay 120 to 181 days (with 365+ days in the preceding four years) and you become a resident — but, by design, an RNOR, not an ordinarily resident. Your foreign income still stays out; the change is mainly to compliance posture.
Counting days correctly
Three practical rules save arguments later. Count for the tax year — 1 April to 31 March — not the calendar year. Count physical presence: the days of arrival and departure both generally count as days in India, so a "two-week trip" is often sixteen countable days. And keep evidence: passport stamps and travel records are what an Assessing Officer will ask for if your status is questioned, and reconstructing five years of itineraries after the fact is miserable work. Frequent travellers should maintain a running day log per tax year.
Deemed residency
Separately, an Indian citizen with India-sourced income above ₹15 lakh who is not liable to tax in any other country by reason of residence or domicile is deemed a resident of India — again as RNOR. This targets the "resident of nowhere" arrangement; it matters most to NRIs in zero-tax jurisdictions, and treaty status can interact with it — see how NRIs claim DTAA relief.
The short version
Under 182 days, you are normally an NRI. Over ₹15 lakh of India income, watch the 120-day mark. Even when those rules catch you, they make you RNOR — foreign income stays out of Indian tax. All of this is unchanged under the Income-tax Act, 2025.
RNOR: the window that protects returning NRIs
A resident is RNOR (rather than ROR) for a tax year if either:
- they were non-resident in 9 of the 10 preceding years, or
- they spent 729 days or fewer in India across the preceding 7 years,
plus the two routes above (the 120–181-day visitor and the deemed resident), which land directly in RNOR.
For an NRI moving back to India after a long stint abroad, these tests usually deliver two to three transition years of RNOR status. During that window, overseas salary earned before the move, foreign rental income, foreign interest and gains on foreign assets generally remain outside Indian tax. It is the natural period to reorganise overseas holdings, redesignate accounts and time asset sales — before ROR status brings worldwide taxation and full foreign-asset reporting.
The RNOR window is the one tax holiday the law hands a returning NRI. The mistakes happen when people only discover it after it has lapsed.
Worked examples
Example 1 — the regular visitor. Asha, an OCI in Singapore, visits India for 100 days in the tax year. Her India income is rent of ₹6 lakh. Under 120 days and under ₹15 lakh on both counts — she is a non-resident. Only her Indian rent is taxable in India.
Example 2 — the 120-day catch. Rahul, an NRI in Dubai, spends 150 days in India and has Indian dividends, interest and rent of ₹22 lakh, with 400+ days in India over the past four years. Over 120 days with India income above ₹15 lakh — he is a resident, but RNOR. His Indian ₹22 lakh is taxed; his Dubai salary is not. As an Indian citizen untaxed in the UAE, the deemed-residency rule would in any case point to the same RNOR outcome.
Example 3 — the returner. Meera moves back to Hyderabad in July 2026 after 12 years in the US, having been non-resident in 9 of the last 10 years. For her first years back she qualifies as RNOR. Her US investment income stays outside Indian tax during the window; her Indian salary is taxable from day one.
Status also drives the withholding you face on Indian transactions — an NRI selling property, for instance, sits in a different TDS regime entirely; see TDS on sale of property by an NRI.
Make it a yearly habit
Residential status is determined year by year — last year's answer does not carry forward. A simple annual routine keeps it clean: total your India days for the tax year just ended; check whether your India-sourced income crossed ₹15 lakh (which switches you to the 120-day test); if you returned to India recently, re-test the RNOR conditions before filing, because the window closes on its own schedule, not yours. Five minutes in April prevents the expensive version of this conversation in an assessment three years later.
S. K. Lahoti Associates works out residential status, plans the RNOR window and handles the related filings for NRIs and returning Indians — the scope is described under our NRI services. For a status assessment on your facts, you can reach the firm here.
Frequently asked questions
No. The residential-status tests sit in Section 6 of the new Act — the same section number as the 1961 Act — and the substance is unchanged: the 182-day rule, the 60-plus-365-day rule, the 120-day test for visiting NRIs with India income above ₹15 lakh, deemed residency, and the RNOR categories all continue as before.
Resident but Not Ordinarily Resident — an intermediate status. An RNOR is a resident for the year but is taxed broadly like a non-resident: Indian income is taxable, while most foreign income stays outside Indian tax. It typically applies to returning NRIs for their first transition years.
Up to 181 days in the tax year under the basic rule. But a visiting NRI or PIO whose India-sourced income exceeds ₹15 lakh should watch the 120-day mark — staying 120 to 181 days (with 365-plus days over the preceding four years) makes them resident, though only as RNOR.
Generally no. An RNOR pays Indian tax on income received or accruing in India and on income from a business controlled from India, but ordinary foreign-source income — overseas salary, foreign rent, foreign interest — remains outside Indian tax for the RNOR years.
An Indian citizen with India-sourced income above ₹15 lakh who is not liable to tax in any other country by reason of residence or domicile is deemed a resident of India — but as RNOR, so foreign income is still largely protected.