Residential Status in India 2026-27: Resident, RNOR and Non-Resident Rules (Income Tax Act 2025)

Under section 6 of the Income-tax Act, 2025, an individual is a resident of India for a tax year if they stay in India for 182 days or more in that year, or for 60 days or more in that year plus 365 days or more in the four preceding years. Citizens and persons of Indian origin who visit from abroad, and citizens who leave for work abroad, get special treatment. A resident can further be "not ordinarily resident" (commonly called RNOR) under section 6(13).

Residential status is worked out afresh for every tax year, and it decides which of your income India can tax (section 5). This guide covers individuals, HUFs, firms, companies and other persons, with worked examples. Every figure comes from the Act as amended by the Finance Act, 2026 and the Income-tax Rules, 2026. Last reviewed against that text on 10 November 2026. Examples use tax year 2026-27 (1 April 2026 to 31 March 2027).

Why does residential status matter?

Section 5 sets the scope of total income by status:

Status	Income included in total income (section 5)
Resident	Income received or deemed received in India, income accruing or arising in India, and income accruing or arising outside India (section 5(1))
Not ordinarily resident	Same as a resident, except that income accruing or arising outside India is included only if it comes from a business controlled in India or a profession set up in India (section 5(1)(c))
Non-resident	Only income received or deemed received in India, or accruing or arising in India (section 5(2))

The Act defines "resident" as a person who is resident in India as per section 6 (section 2(96)). A "non-resident" is a person who is not a resident (section 2(72)). For a few purposes named in that definition (sections 161, 174 and 312), a not ordinarily resident person is also treated as a non-resident.

Status also decides which TDS provisions apply to a payment. For example, rent to a resident falls under section 393(1), Table Sl. No. 2, while a payment to a non-resident is dealt with under section 393(2) (see TDS on payments to non-residents); our TDS on rent guide covers the resident side.

How do you decide if an individual is a resident in India?

Section 6(2) gives two day-count tests. Meeting either one makes the individual a resident for that tax year.

• Test (a): in India for a total of 182 days or more in the tax year.
• Test (b): in India cumulatively for 60 days or more in the tax year and cumulatively 365 days or more in the four tax years before it.

Two exceptions and one extra rule change test (b). They are covered in the next sections. Section 6(7) also adds a deemed-resident rule for citizens, described below.

Who gets the 120-day rule instead of 60 days?

A citizen of India or a person of Indian origin who lives outside India and comes on a visit to India is not tested under section 6(2)(b) at all (section 6(4)). Such a person becomes resident only through the 182-day test.

There is one catch. If their total income, other than income from foreign sources, exceeds Rs 15 lakh in that tax year, section 6(2)(b) applies after all, but with 120 days in place of 60 (section 6(5)). The 365-day condition for the four preceding years stays.

A "person of Indian origin" is an individual who, or either of whose parents or any of whose grandparents, was born in undivided India (section 2(78)). "Income from foreign sources" means income that accrues or arises outside India, except income from a business controlled in India or a profession set up in India, and which is not deemed to accrue or arise in India (section 6(14)).

What if an Indian citizen leaves India for work or as ship crew?

Section 6(3) switches off test (b) for an Indian citizen who leaves India in the tax year as a member of the crew of an Indian ship, or for the purposes of employment outside India. Only the 182-day test can make them resident for that year.

For a citizen who is crew on a foreign-bound ship, section 6(6) leaves the day count to the Rules. Under rule 8, the days from the date of joining the ship to the date of signing off, as entered in the Continuous Discharge Certificate, are not counted as days in India for an eligible voyage. An eligible voyage is one by a ship carrying passengers or freight in international traffic, either from an Indian port to a port outside India or the other way round.

What is a deemed resident under section 6(7)?

Even if no day-count test is met, an individual is deemed resident for the tax year if all three of these hold (section 6(7)):

• they are a citizen of India;
• they are not liable to tax in any other country or territory because of domicile, residence or a similar criterion; and
• their total income, other than income from foreign sources, exceeds Rs 15 lakh in the tax year.

Section 6(8) says this rule does not apply to someone who is already a resident under sections 6(2) to 6(6). A deemed resident who is a citizen is always "not ordinarily resident" (section 6(13)(c)).

What is "not ordinarily resident" (RNOR)?

The Act uses the words "not ordinarily resident"; RNOR is the shorthand people use for a resident but not ordinarily resident. Under section 6(13), a person is not ordinarily resident in a tax year if any one of these applies:

Who	Condition (section 6(13))
Individual, or HUF whose manager meets it	(a)(i) Non-resident in 9 of the 10 tax years preceding that year
Individual, or HUF whose manager meets it	(a)(ii) In India cumulatively 729 days or less in the 7 tax years preceding that year
Citizen of India or person of Indian origin	(b) Total income excluding foreign-source income above Rs 15 lakh, and in India 120 days or more but less than 182 days in the tax year
Citizen deemed resident under section 6(7)	(c) Always not ordinarily resident

A resident who meets none of these is an ordinarily resident, taxed on the full scope in section 5(1).

Worked example 1: a citizen visiting from abroad (tax year 2026-27)

Ravi is an Indian citizen who lives and works abroad. In 2026-27 he spends 130 days in India. He was in India for 500 days in total across the four preceding tax years. His income in India other than foreign-source income is Rs 18,00,000 (assumed figures).

Step	Check	Result
1	182 days or more? 130 is below 182	Test (a) not met
2	Citizen visiting from outside India: section 6(4) switches off test (b), unless section 6(5) applies	Go to step 3
3	Income Rs 18,00,000 is above Rs 15,00,000, so "60 days" becomes "120 days"	Section 6(5) applies
4	130 is 120 or more, and 500 is 365 or more	Resident under 6(2)(b)
5	Income above Rs 15 lakh and 130 days is between 120 and 181	Not ordinarily resident under 6(13)(b)

Change one fact: if Ravi's Indian income were Rs 12,00,000, section 6(5) would not apply, test (b) would stay off and 130 days is below 182. He would be a non-resident for 2026-27.

Worked example 2: a foreign national posted to India (tax year 2026-27)

Meena is a foreign national with no Indian origin or citizenship, assigned to an Indian office. In 2026-27 she is in India for 75 days. Her stay in the four preceding tax years was 120, 110, 100 and 90 days. In the three years before those she was in India 60, 40 and 30 days. She was a non-resident in 6 of the 10 preceding years (assumed figures).

Step	Calculation	Result
1	75 days in 2026-27 is below 182	Test (a) not met
2	75 is at least 60. Four preceding years: 120 + 110 + 100 + 90 = 420, which is at least 365	Resident under 6(2)(b)
3	Non-resident in 6 of 10 years, not 9	6(13)(a)(i) not met
4	Seven preceding years: 120 + 110 + 100 + 90 + 60 + 40 + 30 = 550, which is 729 or less	6(13)(a)(ii) met: not ordinarily resident

Worked example 3: a citizen who lives in a no-tax country (tax year 2026-27)

Sunil is an Indian citizen who lives in a country that does not tax personal income, so he is not liable to tax there on account of residence. In 2026-27 he is in India for only 30 days but earns Rs 20,00,000 of Indian rent and business income (assumed figures).

Condition under section 6(7)	Sunil	Met?
(a) Citizen of India	Yes	Yes
(b) Not liable to tax elsewhere by reason of domicile or residence	No tax on residence in that country	Yes
(c) Income other than foreign-source above Rs 15,00,000	Rs 20,00,000	Yes

All three are met, so Sunil is a deemed resident, and under section 6(13)(c) he is not ordinarily resident. His days in India (30) did not matter.

Real-life example: leaving India for a job abroad

Arjun, an Indian citizen who has always lived in India, takes a job in Dubai and leaves on 1 September 2026. By then he has spent 153 days in India in 2026-27 (April to August). Because he leaves for employment outside India, section 6(3) removes the 60-day plus 365-day test for this year. Only the 182-day test is left, and 153 is below it. Arjun is a non-resident for 2026-27, despite many years of earlier stay. In later years, when he visits India as a citizen who lives abroad, section 6(4) keeps test (b) off unless his Indian income goes above Rs 15 lakh.

Real-life example: a seafarer

Imran, an Indian citizen, serves on a ship on international voyages between Indian and foreign ports. For each voyage, rule 8 excludes the time between the joining and signing-off dates shown on his Continuous Discharge Certificate from his days in India for that voyage. His section 6(2) count is made on the days left after that exclusion.

Is residential status the same as citizenship or being an NRI?

No. Section 6 decides status mainly on days spent in India (and, for companies, firms and HUFs, on where control sits). Citizenship matters only in specific places: sections 6(3), 6(4), 6(7) and 6(13)(b), (c). So an Indian citizen who spends most of the year abroad can be a non-resident, and a foreign national who stays long enough in India can be a resident.

"NRI" is not a status under section 6. The Act's definition of "non-resident Indian" is an individual who is not a resident and is a citizen of India or a person of Indian origin (section 212(d), which section 393 also uses). It matters for the special provisions for foreign exchange assets in sections 213 to 218. A citizen who is a resident but not ordinarily resident is therefore not an NRI under that definition.

Only individuals and HUFs can be not ordinarily resident. Section 6(13) lists no firm, company or other person, so those are either resident or non-resident.

How is residential status decided for HUFs, firms, companies and others?

Person	Resident if	Section
HUF, firm or other association of persons	Control and management of its affairs is not wholly outside India in the tax year	6(9)
Company	It is an Indian company, or its place of effective management is in India in the tax year	6(10)(a)
Every other person	Control and management of its affairs is not wholly outside India in the tax year	6(11)

"Place of effective management" is a place where key management and commercial decisions needed to run the company as a whole are, in substance, made (section 6(10)(b)). Take a company registered in Singapore whose managing director takes the key decisions from an office in Pune. The company is resident in India for that tax year because its place of effective management is in India, even though it is not an Indian company (more in foreign company treated as resident).

A partnership whose partners decide everything from Dubai, with no part of the control and management in India during the year, is not resident in India. If even part of the control and management sits in India, the firm is resident, because the test is "wholly outside India".

A HUF whose manager meets the section 6(13)(a) conditions is not ordinarily resident, as shown in the RNOR table above.

Does being resident for one source make you resident for all?

Yes. Under section 6(12), if a person is resident in India in a tax year for any source of income, they are resident for each of their other sources too. Status belongs to the person for the tax year, not to an individual income stream.

Quick reference: thresholds in section 6

Test	Threshold	Section
Days in India in the tax year	182 or more	6(2)(a)
Days in tax year plus preceding four years	60 and 365	6(2)(b)
Same, citizen or person of Indian origin visiting, Indian income above Rs 15 lakh	120 and 365	6(5)
Deemed resident citizen: Indian income above	Rs 15 lakh	6(7)(c)
RNOR: non-resident years out of last 10	9	6(13)(a)(i)
RNOR: days in India in last 7 years	729 or less	6(13)(a)(ii)
RNOR: citizen or person of Indian origin, days in the year	120 or more, less than 182 (and income above Rs 15 lakh)	6(13)(b)

What are the common mistakes with residential status?

• Testing only the 182-day rule. A person with 75 days in the year can still be a resident under section 6(2)(b) when the four-year count reaches 365.
• Missing the Rs 15 lakh trigger. For a visiting citizen or person of Indian origin, Indian income above Rs 15 lakh moves the threshold from "test off" to 120 days under section 6(5).
• Counting foreign income toward Rs 15 lakh. The figure excludes income from foreign sources, as defined in section 6(14).
• Reusing last year's status. Status is set per tax year, so every year needs a fresh count.
• Ignoring section 6(7). A citizen with high Indian income who is taxed nowhere else can be a deemed resident with only a handful of days in India.
• Treating residence of a company as a matter of incorporation. A foreign-incorporated company can be resident where its place of effective management is in India.

How do CA firms keep track of client residency each year?

For a CA firm, the hard part is collecting each client's travel dates, prior-year day counts and income mix before filing, then repeating the exercise every year. Finexo's practice management software lets you keep these checklists and the related due dates in one place across your client book. It does not decide residential status for you.

Where is this in the Act?

• Section 6: residence in India (sub-sections 6(1) to 6(14))
• Section 212(d): definition of "non-resident Indian"
• Section 5: scope of total income by residential status
• Section 3: definition of "tax year"
• Section 2(53), 2(72), 2(78), 2(96): Indian company, non-resident, person of Indian origin, resident
• Rule 8 of the Income-tax Rules, 2026: days in India for crew of a foreign-bound ship
• Rule 74: option for taxing income of a retirement benefit account in a notified country, which refers to non-resident and not ordinarily resident years
• Rule 144: unit holders of a specified fund who become resident under section 6(2) to (7)

This article explains the Income-tax Act, 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. Confirm the position for a specific case, including how to count arrival and departure days, with a qualified chartered accountant.