An individual’s or entity’s residential status in India determines the scope of their income-tax liability. A person is categorized as either a resident or a non-resident during a previous year. For individuals and Hindu Undivided Families (HUFs) classified as residents, a further classification is made into Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR). For an individual who is not an Indian citizen, a Person of Indian Origin (PIO), or an Indian citizen leaving India for employment/crew member, they become a resident if their stay in India is 182 days or more in the current year, or if their stay is 60 days or more in the current year and 365 days or more in the preceding four years. Once classified as a resident, they are considered an RNOR if they have stayed in India for 729 days or less in the preceding seven years, or have been a non-resident in nine out of the ten preceding years.
Special rules apply to Indian citizens or Persons of Indian Origin (PIOs) visiting India and to Indian citizens leaving India for employment or as a crew member. For these categories, the 60-day rule is extended to 182 days for those with income (excluding foreign sources) below ₹15 lakh. For those with income exceeding ₹15 lakh, the stay requirement is reduced to 120 days or more (but less than 182 days) in the current year, in addition to the 365-day rule, to be considered a resident. However, even if they meet the 120-day rule, they are always deemed an RNOR. Furthermore, an Indian citizen with income over ₹15 lakh who is not liable to tax in any other country due to domicile or residence is deemed a resident and is always treated as an RNOR, effectively subjecting their Indian-sourced income to Indian tax. The RNOR criteria for these special categories remain the same as the general individual.
Residence in India for the purpose of the Income-tax Act, 1961
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 be a 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 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. |
| 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; or such 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 |
[As amended by Finance Act, 2025]
(Republished with amendments)
