Residential Status Section 6 of the Income Tax Act

Your residential status decides how much of your income is taxed in India.

Whether you’re an Indian citizen or a foreigner, Section 6 tells the government if you’re a resident or not for tax purposes.

What Is Residential Status?

In India, the level of your tax liability is determined by your residential status. It is determined by the number of days you spend in India during a fiscal year (April–March) and is assessed under Section 6 of the Income Tax Act.

Types of Residential Status

There are three main categories:

1. Resident and Ordinarily Resident (ROR)

• Taxed on global income (both Indian and foreign).

2. Resident but Not Ordinarily Resident (RNOR)

• Taxed on income earned in India and foreign income if it is derived from a business controlled in India.

3. Non-Resident (NR)

• Taxed only on income earned or received in India.

Type	Criteria
Resident and Ordinarily Resident (ROR)	Lived in India for 2+ years out of last 10 and 730+ days in last 7 years
Resident but Not Ordinarily Resident (RNOR)	If you don’t meet both above conditions

How is residential status determined

Based on how many days you stay in India in a financial year (April–March).

1. Stayed in India for 182 days or more in the financial year
2. Stayed in India for 60 days or more in the financial year and Stayed for 365 days or more in the last 4 years

📝 Note: For Indian citizens or PIOs living abroad, the 60-day rule becomes 182 days if they visit India.

Why Does residential status Matter?

Your residential status affects your tax liability:

Residential Status	Taxed on Income From
Resident & Ordinarily Resident (ROR)	Worldwide income (India + foreign)
Resident but Not Ordinarily Resident (RNOR)	Income from India + foreign income if derived from business controlled in India
Non-Resident (NR)	Only Indian income is taxed

Resident vs Non-Resident status

Person Type	Days in India	Residential Status
Indian visiting from abroad for 120 days	120 days	Non-Resident
Indian staying 185 days in India	185 days	Resident
Foreign national in India for 190 days	190 days	Resident
Indian returning from UAE, stayed 250 days	250 days	Resident

Example for residential status (Layman)

• Ramesh is an Indian working in Dubai.
• He visits India for 100 days in FY 2025–26.
• In the last 4 years, he stayed in India for 400 days.

✔️ He meets the 60+365 rule, so he becomes Resident. BUT – because he has been living abroad for many years, he may qualify as RNOR, not fully Resident.

 Quick Tips:

• You don’t need to be an Indian citizen to be treated as a “resident” for tax.
• Even if you’re a resident for just a few extra days, your global income could be taxed.
• Use Form 10FA/10FB to obtain a certificate of residential status (for tax treaty purposes).

Conclusion

“Where you live (or how long you live here) decides what income is taxed.”
More days in India = more tax exposure (even on foreign income in some cases!)

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