NRI Residential Status: the 182-Day, 120-Day and RNOR Tests Explained

Your Indian residential status is decided afresh for every tax year, on day counts and two ₹15 lakh tests, and it drives everything else: what India taxes, what rate applies to a property sale, and whether you get indexation.

Last verified: 5 September 2026 · Applies to: Tax Year 2026-27 (Income-tax Act, 2025)

Contents

• The answer changes every year, and that is the point
• The section is still 6, but every sub-section moved
• The four tests, in the order you should apply them
• RNOR: the category that does most of the work
• The decision tree
• Two illustrative day counts
• What follows from the answer
• Frequently asked questions
• How BVACA can help

The answer changes every year, and that is the point {#the-answer-changes-every-year}

"Am I an NRI?" is not a question about your passport, your visa, your OCI card or where your family lives. It is an arithmetic question asked afresh for each tax year, and a person can be non-resident in one year, resident but not ordinarily resident in the next, and ordinarily resident in the one after that, having changed nothing except the number of nights spent in India.

It matters more than most people expect. Status decides whether your Dubai salary or Canadian dividend is in the Indian net at all, whether a property sale attracts 1% TDS or a composite rate on the full consideration, and whether you get indexation on a flat bought in 2012, because TDS on the sale of property by an NRI runs on an entirely different provision from the resident equivalent. Settle status first, then compute.

The section is still 6, but every sub-section moved {#the-section-is-still-6}

The Income-tax Act, 2025 came into force on 1 April 2026 and repealed the 1961 Act. Residential status is one of the few places where the section number survived the renumbering. It is still section 6. Everything inside it moved.

This is a common source of confusion in 2026, because a checklist quoting sub-sections of section 6 from the 1961 Act is quoting a repealed statute. The substance is largely carried over; the citations are not. If you are cross-reading older material, keep the old-to-new section mapping under the Income-tax Act, 2025 alongside it, and note that "previous year" and "assessment year" are gone, which is why "assessment year" has been replaced by "tax year".

The four tests, in the order you should apply them {#the-four-tests}

Test 1: 182 days in India (s.6(2)(a))

If you were in India for 182 days or more during the tax year, you are resident. Full stop. No income test, no citizenship test, no exceptions to work through.

Count the tax year as April to March, and count days of physical presence precisely rather than approximately. A two-day discrepancy at each end of four trips is eight days, which is enough to move a borderline case.

Test 2: 60 days in the year plus 365 across four years (s.6(2)(b))

If Test 1 fails, you are still resident if you were in India for 60 days or more in the tax year and 365 days or more across the four preceding years.

The 365-day limb catches almost every NRI who visits family regularly: a Gulf-based professional who comes home monthly clears it easily. So for most people the question turns on the first limb, and on whether that 60 becomes 120 or 182.

Test 3: the 120-day rule and the ₹15 lakh trap (s.6(5) read with s.6(4))

This is the provision that surprises people, and it applies only to an Indian citizen or a person of Indian origin who is visiting India.

For such a person:

• Indian-source income above ₹15 lakh in the tax year: the 60-day limb in Test 2 becomes 120 days
• Otherwise: the 60-day limb becomes 182 days, which in practice means Test 2 cannot bite before Test 1 already has

Read that as a single sentence: a visiting NRI with more than ₹15 lakh of Indian income becomes resident at 120 days rather than 182. Someone with rental income from two flats in Panchkula, interest on an NRO deposit and a share of a family firm's profit can cross ₹15 lakh without feeling wealthy, and then spend a long winter in India and become resident at day 120 without realising the threshold moved.

On the "visiting India" limb of s.6(5): the phrase turns on facts, not paperwork. A person who has maintained a home abroad and a livelihood abroad but comes to India for periods within the tax year (family visits, medical treatment, extended stays) is "visiting". A person who has surrendered the foreign home, closed the foreign job or business, and moved back to India permanently mid-year is not "visiting" — they are returning; the 120-day limb does not apply from that point, and residency is decided under the ordinary 60/365 test with the 60-day floor.

Test 4: deemed residency for the stateless taxpayer (s.6(7))

Section 6(7) is aimed at a specific person: an Indian citizen whose total income excluding foreign-source income exceeds ₹15 lakh and who is not liable to tax in any other country by reason of domicile, residence or any similar criterion.

Three things about it.

It applies to Indian citizens only. An OCI holder or a PIO who is not an Indian citizen is outside s.6(7), even on identical facts. That distinction matters in the Gulf, where a great many people hold one status rather than the other.

"Not liable to tax anywhere" is the trigger. If you are tax resident in the UK, the US, Canada or Australia, s.6(7) does not reach you. It is aimed at people resident in jurisdictions that do not levy personal income tax.

There is a softener, and it is important. A person deemed resident under s.6(7) falls into RNOR, so foreign income is not swept into the Indian net. The provision is a reporting and Indian-income measure rather than a device for taxing a Dubai salary.

The ₹15 lakh threshold in s.6(4) and s.6(7) is tested on total income before Chapter VI-A deductions — Chapter VI-A only reduces the base for tax computation, not for residency. So a taxpayer with ₹18 lakh of gross India-source income and ₹5 lakh of Chapter VI-A deductions is over the ₹15 lakh threshold for residency purposes, even though their taxable base is ₹13 lakh.

RNOR: the category that does most of the work {#rnor}

India has three statuses, not two: non-resident, resident but not ordinarily resident (RNOR) and ordinarily resident. RNOR is the transition category, and for a returning NRI it is usually the difference between a manageable first few years back and an unpleasant surprise.

Under s.6(13), a resident individual is not ordinarily resident if either:

• they were non-resident in 9 of the 10 preceding years, or
• they were present in India for 729 days or less in the 7 preceding years

Either limb is enough. A person who spent fifteen years in Toronto and moved back to Mohali in 2026 will comfortably satisfy both, and will therefore be RNOR rather than ordinarily resident in their first years back, even in a year when they are plainly resident on day count.

A person who is resident only by virtue of the 120-day limb in s.6(5) is automatically treated as RNOR under s.6(13) — the 2025 Act carries the 1961 Act position forward on this point. That is a meaningful softener: it means a visiting NRI who crosses 120 days but is otherwise non-resident in nine of the preceding ten years does not have foreign income swept into the Indian net, only India-source income.

The decision tree {#the-decision-tree}

Work down the table. Stop at the first row that gives you an answer.

Two illustrative day counts {#two-illustrative-day-counts}

Illustrative example 1: the returning NRI with Indian rental income.

An Indian citizen who has lived in London since 2014 spends 130 days in India during Tax Year 2026-27, visiting family and settling a property matter. He has ₹20 lakh of Indian rental income for the year. Over the four preceding years he averaged about 100 days a year in India, comfortably past 365.

• Test 1: 130 days is under 182. Not resident on this limb.
• Test 3: he is an Indian citizen visiting India with Indian-source income above ₹15 lakh, so the 60-day limb becomes 120 days.
• Test 2 as modified: 130 days is at or above 120, and he has more than 365 days across four preceding years. Resident.
• Then s.6(13): he has been non-resident in 9 of the 10 preceding years, so he is RNOR.

Had his Indian income been ₹12 lakh rather than ₹20 lakh, the limb would have been 182 days, and 130 days would have left him non-resident. Eight lakh of rental income changed his status.

Illustrative example 2: the Gulf-based professional with no other tax residence.

An Indian citizen has worked in Dubai for six years, spends 45 days in India in the tax year, and is not liable to tax in the UAE or anywhere else.

• Tests 1 and 2: 45 days, so both fail. Not resident on day count.
• Test 4, s.6(7): he is an Indian citizen and not liable to tax in any other country, so the question is his income other than foreign-source income.
• Indian income of ₹9 lakh: below ₹15 lakh, so s.6(7) does not apply. Non-resident.
• Indian income of ₹18 lakh: above ₹15 lakh, so he is a deemed resident, but he falls into RNOR, so his UAE salary is not swept into the Indian net.

Note what does not change the answer: how long he has been abroad, whether he owns a flat in India, and whether he holds an OCI card. Note also that if he held OCI rather than Indian citizenship, s.6(7) would not reach him at all.

Figures and day counts are illustrative.

What follows from the answer {#what-follows}

Once status is settled, the rest of the year's planning follows from it:

• Non-residents are taxed on Indian-source income, with the special provisions in ss.213 to 217 (old ss.115C to 115I) where they apply.
• No indexation. Section 197(3), the lower of 12.5% without indexation or 20% with, is expressly limited to an individual or HUF "being a resident".
• Property TDS runs on a different provision. A sale by a non-resident falls under s.393(2) Table Sl. No. 17 with no monetary threshold, not the 1% resident route with a ₹50 lakh threshold.
• Treaty relief needs paperwork before the payment. See treaty relief, the TRC and Form 41.
• Foreign assets you have never reported become a live problem as status shifts. A returning NRI who works out that they are now resident, or RNOR on the way to ordinarily resident, is the person most likely to hold a foreign account, RSUs or a property that was never disclosed in an Indian return. Those can be regularised in the FAST-DS 2026 disclosure window, which closes on 31 December 2026, and the year each asset was acquired decides which category applies.

If you are near a threshold and have discretion over travel, this is one of the few areas of Indian tax where a decision in November changes the outcome in March.

Frequently asked questions {#frequently-asked-questions}

Is the NRI rule 182 days or 120 days?

Both, depending on your facts. The basic test in s.6(2)(a) is 182 days. The 120-day figure comes from s.6(5) read with s.6(4), and applies only to an Indian citizen or PIO visiting India whose Indian-source income exceeds ₹15 lakh. For such a person the 60-day limb of s.6(2)(b) becomes 120 days instead of 182.

What is the ₹15 lakh rule for NRIs?

There are two ₹15 lakh tests and they are different. Under s.6(4), Indian-source income above ₹15 lakh reduces a visiting citizen's or PIO's threshold to 120 days. Under s.6(7), total income excluding foreign-source income above ₹15 lakh can make an Indian citizen who is not liable to tax anywhere a deemed resident.

Does deemed residency mean my foreign salary becomes taxable in India?

No. A person deemed resident under s.6(7) falls into the not ordinarily resident category, so foreign income is not swept into the Indian net. The provision is aimed at Indian-source income and reporting, not at taxing a salary earned and kept abroad.

How long does RNOR status last?

It lasts as long as you satisfy either limb of s.6(13): non-resident in 9 of the 10 preceding years, or present in India for 729 days or less in the preceding 7 years. For someone returning after a long stint abroad that is typically the first couple of years back, and it is tested afresh each tax year.

I hold an OCI card, not an Indian passport. Does that change anything?

Yes, in one specific place. Deemed residency under s.6(7) applies only to an Indian citizen, so an OCI holder who is not an Indian citizen is outside it. The 120-day rule in s.6(5), by contrast, applies to an Indian citizen or a person of Indian origin, so it can reach an OCI holder.

How BVACA can help {#how-bvaca-can-help}

Bachhal Vijender & Associates works through residential status as the first step in any cross-border engagement, because the answer changes the computation, the TDS rate and the filing obligation. That usually means reconstructing day counts from passport stamps and travel records, testing them against s.6(2), s.6(5), s.6(7) and s.6(13) year by year, and documenting the conclusion so it stands up if it is examined later.

We work with clients in the US, UK, Canada, the UAE and Australia by email and scheduled calls, with the calls fixed to your evening rather than ours. Where you have an adviser abroad, we act as the India-side partner and coordinate with them.

If you are close to a threshold this year, or you are planning a longer stay in India than usual, it is worth running the numbers before the travel rather than after. See our NRI and returning-resident return filing work, or the wider NRI and cross-border services page.

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Author box: CA Vijender Singh Bachhal, Managing Partner, Bachhal Vijender & Associates (FRN 028355N), Panchkula. About the firm

Disclaimer: This article is general information current as at 5 September 2026, not advice for a specific situation. Tax and corporate law in India changed materially on 1 April 2026; verify the position before acting. Illustrative examples are not client matters.