Quick answer: Tax residency India rules decide how much of a person’s income India can tax. Under section 6 of the Income-tax Act, 2025, an individual is resident after 182 days in India in a tax year, or 60 days plus 365 over the previous four years. Residents then split into ordinarily resident and RNOR. Foreign income follows that split.
- The section number stayed at 6 when the 2025 Act replaced the 1961 Act on 1 April 2026.
- A visiting Indian citizen or person of Indian origin with Indian income above ₹15 lakh faces a 120-day test in place of 60 days.
- An Indian citizen with Indian income above ₹15 lakh who is not taxed anywhere else is deemed resident.
- A resident and ordinarily resident person pays Indian tax on worldwide income.
How are the residency tests applied?
Count this year’s days first. Then look back. The Income Tax Department’s section 6 page sets out each limb.
| Test | Days in India this tax year | Plus |
|---|---|---|
| Basic test | 182 or more | Nothing else |
| Look-back test | 60 or more | 365 or more in the four previous years |
| Indian citizen leaving for a job abroad | 182 or more | The 60-day test is switched off |
| Visiting citizen or PIO, Indian income above ₹15 lakh | 120 or more | 365 or more in the four previous years |
Meet neither the basic nor the look-back test and the person is non-resident. They are taxed in India only on income that arises in India or is received here, which for most visitors means Indian salary and little else.
When does someone count as RNOR?
RNOR (resident but not ordinarily resident) is a halfway status. Resident, yes. But foreign income earned and received abroad stays outside Indian tax.
A resident qualifies as RNOR if any one of these is true:
- non-resident in 9 of the previous 10 tax years
- 729 days or fewer in India over the previous 7 tax years
- a citizen or PIO with Indian income above ₹15 lakh who spent 120 to 181 days in India
- a deemed resident under section 6(7)
Here’s where it bites. Suppose a Pune-born engineer returns from London in June 2026 after eight years away and joins your India team. She clears 182 days, so she is resident for tax year 2026-27. But she spent well under 729 days in India over the previous seven tax years, so she is RNOR. Her UK rental income stays outside Indian tax for now. Our post on how Remunance supports employees returning to India covers the practical side.
How does residency affect an EOR hire?
It changes what is taxed, not who deducts. The employer of record runs TDS on salary on Indian pay for every employee, resident or not.
Residency matters at the edges. A secondment into India may trigger home-country shadow payroll, and a short stay may fall under a DTAA exemption.
How does Remunance track residency for your cross-border hires?
Remunance runs Indian payroll for every hire, resident or not, through its own entity in Pune. When a move to India raises residency questions, we flag them early so the employee’s adviser can deal with foreign income. We’ve hired 1,200+ people for clients across 34 Indian cities. Our guide to EOR tax implications covers the rest. If you’re relocating someone to India, get a relocation tax checklist from us.
What else do people ask about tax residency in India?
What is the 182 days rule in India?
Anyone in India for 182 days or more in a tax year (1 April to 31 March) is resident for Indian income tax. It is the first and simplest limb of section 6.
Is an NRI taxed on salary earned in India?
Yes. Salary for work done in India is taxed in India whatever the residency status. Residency only changes the treatment of foreign income.
How long does RNOR status last?
Until the person stops meeting every RNOR condition. For a returning Indian, that is often two to three tax years, depending on past travel.