NRI Taxation and Compliance (Part 1): Residential Status – NRI, RNOR or Resident?
NRI residential status explained: 182-day rule, 120-day rule above Rs 15 lakh, deemed residency, RNOR and how FEMA residency differs, with worked examples.
A software engineer in Dubai visits Hyderabad every year for about 130 days to look after her parents, and earns Rs 22 lakh a year from rent and deposits in India. “I am an NRI,” she says. Under the current rules, that is not automatically true.
- Part 1: Residential status (you are here)
- Part 2: Income taxation
- Part 3: Property
- Part 4: Banking and investments
- Part 5: Returning to India
- Part 6: Investing in Indian businesses
- Part 7: Gifts, inheritance and succession
- Part 8: TDS, Section 195 and Forms 15CA/15CB
- Part 9: Return filing, refunds and notices
1. The day-count tests (tax year 2026-27)
| Situation | Test to become resident |
|---|---|
| Any individual | 182 days or more in the tax year; or 60 days in the year plus 365 days in the 4 preceding years |
| Indian citizen or PIO visiting India, Indian income up to Rs 15 lakh | 60 days replaced by 182 days, so only the 182-day limb works |
| Indian citizen or PIO visiting India, Indian income above Rs 15 lakh (excluding foreign-source income) | 60 days replaced by 120 days: 120 days plus 365 days in the preceding 4 years makes you resident (but only RNOR) |
| Indian citizen leaving India for employment abroad, or crew of a foreign-bound ship | 60 days replaced by 182 days |
| Deemed resident (Section 6(7)) | Indian citizen with Indian income above Rs 15 lakh who is not liable to tax in any other country by reason of domicile or residence: treated as resident (RNOR) |
2. NR, RNOR or ROR: why the label matters
| Status | How you get it | What India taxes |
|---|---|---|
| Non-Resident (NR) | Fails the tests above | Income received in India, accruing or arising in India, or deemed to |
| Resident but Not Ordinarily Resident (RNOR) | Resident, and either NRI in 9 of the previous 10 years or in India 729 days or fewer in the previous 7 years; also always for deemed residents and 120-day cases | Indian income, plus foreign income only if from a business controlled in or profession set up in India |
| Resident and Ordinarily Resident (ROR) | Resident, and resident in 2 of the previous 10 years and 730 days or more in the previous 7 | Worldwide income |
3. Three worked examples
| Person | Facts | Result |
|---|---|---|
| Anita | Dubai resident, Indian citizen, 130 days in India, Indian income Rs 22 lakh, 365+ days in last 4 years | Resident, but RNOR (120-day rule applies because income exceeds Rs 15 lakh) |
| Ravi | London resident, Indian citizen, 100 days in India, Indian income Rs 8 lakh | Non-resident |
| Meera | Returned to India permanently, 250 days in the year, NRI for 9 of the last 10 years | Resident and RNOR |
These are illustrations to show how the tests combine; real status depends on exact day counts and income computation.
ComplianceKart reviews your passport days, income and past years to fix your residential status and prepares the right ITR. See our income tax return filing service.
4. FEMA residency is separate
FEMA asks whether you are a “person resident in India” under Section 2(v) (generally more than 182 days in the preceding financial year, adjusted for those who have left India for employment, business or an indefinite stay abroad). A person can be a non-resident for tax and resident under FEMA, or vice versa. Your FEMA status decides bank accounts, investment routes and repatriation rules; your tax status decides what is taxed. Read FEMA Part 1 for the FEMA test.
5. Mistakes NRIs make
- Counting calendar-year days instead of the Indian tax year.
- Ignoring the Rs 15 lakh and 120-day rule for visiting citizens.
- Not tracking passport stamps and flight records.
- Assuming being resident under tax means resident under FEMA, or the opposite.
- Forgetting the deemed-resident rule for those with no tax residency anywhere.
- Not claiming treaty benefits (Form 10F, Tax Residency Certificate).
Why work with ComplianceKart
ComplianceKart is a boutique practice bringing Chartered Accountants, Company Secretaries and advocates under one roof. Think of a multi-speciality hospital: the physician, the radiologist and the pharmacist read from one patient file, so you never carry reports between buildings. Residential status affects income tax, FEMA, banking and property in one go. One team reviewing all of them keeps the answers consistent.
Frequently Asked Questions
How many days make me resident in India?
Generally 182 days in the tax year, or 60 days plus 365 days in the preceding 4 years, with higher thresholds (182 or 120 days) for visiting citizens and persons of Indian origin.
What is RNOR?
Resident but Not Ordinarily Resident: a transitional status where foreign income is generally not taxed in India.
Is FEMA residency the same as tax residency?
No. The tests differ, so check both.
What is deemed residency?
An Indian citizen with Indian income above Rs 15 lakh who is not liable to tax in any other country is treated as resident (RNOR).
Which Act applies for FY 2025-26?
The Income-tax Act, 1961. The Income-tax Act, 2025 applies from tax year 2026-27.
Sources
- Income-tax Act, 2025: Section 6 (tax year 2026-27 onwards); Income-tax Act, 1961: Section 6 (earlier years)
- Income Tax Department e-filing help pages on non-resident status
- FEMA, 1999: Section 2(v)
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Educational article, last updated 11 November 2026. General information, not advice on a specific case. Laws and due dates change; confirm on the date you act. Items marked (confirm) came from secondary sources and need checking against the official text.
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