Residential status under the Income-tax Act is a key factor in determining an assessee’s total income and tax liability in India. An assessee may be classified as a resident or non-resident, while a resident individual or Hindu Undivided Family (HUF) may further be categorised as Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR). For individuals, residential status depends primarily on the period of stay in India, income (excluding foreign income), citizenship, purpose of visit or departure, and whether the individual is liable to tax in another country. Indian citizens and Persons of Indian Origin visiting India, as well as Indian citizens leaving India for employment or as crew members, are subject to specific residency thresholds and deemed RNOR provisions in certain situations. HUFs are treated as residents if their control and management are in India, while Indian companies are always residents. Foreign companies are residents only if their Place of Effective Management (POEM) is in India. Firms, AOPs and BOIs are residents if their control and management are situated in India. The summary reflects the provisions as amended by the Finance Act, 2026.
Residence in India for the purpose of the Income-tax Act
The income-tax liability of an assessee is calculated on basis of his total Income. What is to be included in total income of assessee is greatly influenced by his residential status in India.
An assessee can be categorized as a resident in India or a non-resident in India during the previous year. Further, if the assessee is an individual or a HUF and he is resident in India, his residential status is further sub-classified as a resident and ordinarily resident or resident but not ordinarily resident.
The residential status of a person is categorised into the following categories:
| Individual | When treated as a resident? | When treated as a resident but not ordinarily resident? |
| Indian Citizen visiting India having income* < Rs. 15 lakhs | If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; or
such individual is a non-resident in 9 out of 10 preceding years. |
| Indian Citizen visiting India having income*> Rs. 15 lakhs | If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; or
such individual is a non-resident in 9 out of 10 preceding years. |
| If the period of stay in India is 120 days or more but less than 182 days in current year and 365 days or more in last 4 years | Always deemed to bea not-ordinary resident | |
| If such individual is not liable to tax in any other country due to his domicile or residence or any other criteria of similar nature | Always deemed to be a not-ordinary resident | |
| Person of Indian Origin visiting Indiahaving income*< Rs. 15 lakhs | If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; or
such individual is a non-resident in 9 out of 10 preceding years. |
| Person of Indian Origin visiting India having income*> Rs. 15 lakhs | (a) If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; or
such individual is a non-resident in 9 out of 10 preceding years. |
| (b) If the period of stay in India is 120 days or more but less than 182 days in current year and 365 days or more in last 4 years | Always deemed to be a not-ordinary resident | |
| Indian Citizen, having Income*< Rs. 15 lakhs, leaving India:
(a) As a member of the crew of an Indian ship; or (b) For the purposes of employment outside India. |
If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; orsuch individual is a non-resident in 9 out of 10 preceding years. |
| Indian Citizen, having income* > 15 lakhs, leaving India:
(a) As a member of the crew of an Indian ship; or (b) For the purposes of employment outside India. |
If his period of stay in India during the current year is 182 days or more | If the period of stay in India is 729 days or less in past 7 years; or
If such individual is non-resident in 9 out of 10 preceding years. |
| If such individual is not liable to tax in any other country due to his domicile or residence or any other criteria of similar nature | Always deemed as not-ordinary resident | |
| Any other Individual | (a) If his period of stay in India during the current year is 182 days or more; or
(b) If his period of stay in India is 60 days or more but less than 182 days in the current year and 365 days or more in the last 4 years.
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If the period of stay in India is 729 days or less in past 7 years; or such individual is a non-resident in 9 out of 10 preceding years.
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| Note 1: An individual is considered as a non-resident in India if any of the conditions required to be fulfilled to become a resident are not satisfied.
Note 2: Any other Indian citizen (not covered above) having Income*more than Rs. 15 lakhs shall be deemed as a resident, if he is not liable to tax in any other country due to his domicile or residence or any other criteria of similar nature. *Income means total income, other than the income from foreign sources. |
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| Person other than an Individual | Resident | Non-Resident |
| HUF | If control and management of HUF are in India.
A resident HUF is further classified into ‘Resident but not Ordinarily Resident’ if: a) The period of stay of Karta in India is 729 days or less in last 7 years; or b) Karta is ‘non-resident’ in 9 out of 10 preceding years. |
If control and management of HUF is situated wholly outside India |
| Indian Co. | Always treated as a resident in India | – |
| Foreign Co. | If the Place of Effective Management (POEM) of Foreign Co. is in India | If the Place of Effective Management (POEM) of Foreign Co. is outside India |
| Firm/Association of Persons (AOP)/ Body of Individuals (BOI) etc. | If control and management of the assessee is situated in India | If control and management of the assessee is situated wholly outside India |
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Disclaimer: The contents of this document are for information purposes only. This aims to enable public to have a quick and an easy access to information and do not purport to be legal documents. Viewers are advised to verify the content from Government Acts/Rules/Notifications etc.
“This document contains the provisions of the Income-tax Act, 1961, as amended by the Finance Act, 2026.”
[As amended by Finance Act, 2026]
(Republished with amendments)
