Section 6, Income-tax Act 2025: Residence in India

What changed when Section 6 was rewritten for the 2025 Act?

Almost nothing of substance, and one thing in the language. The residence rules keep their home at Section 6, and the tests, the day counts and the ₹15 lakh figure all carry over from the 1961 Act unchanged. What changed is the vocabulary: the Act now says "tax year" where the old law said "previous year", and the sub-sections were reorganised and renumbered into a single, longer Section 6.

The 1961 Act ran residence through Section 6(1) for the 182-day and 60-plus-365 tests, 6(1A) for deemed residency, 6(6) for the not-ordinarily-resident status, and a set of Explanations that carved out foreign-employment departures and visiting NRIs. The 2025 Act keeps every one of those rules and re-expresses them. If you have read your status off the old Act, the answer does not change; only the clause numbers you would cite do.

Why residence matters at all: it is what decides the reach of Indian tax on you. A resident is taxed on worldwide income. A non-resident is taxed only on income earned or received in India. Get the day count wrong and you can hand India tax on a foreign salary it was never owed, or miss Indian tax on income it was.

Section number and its retention cross-checked against published copies of the enacted Act.†

The two tests that decide if you are a resident

You are a resident if you meet either of two tests; fail both and you are a non-resident. Both run on days of physical presence in India, counted fresh for each tax year (1 April to 31 March).

Test A, the basic rule: 182 days or more in India during the tax year makes you a resident, full stop. Your citizenship, your visa and the reason you were here are all irrelevant.

Test B, the two-part rule: 60 days or more in India this tax year and 365 days or more across the four preceding tax years, together, also make you a resident. This is the test that catches people who split their life between India and abroad and assume the 182-day line is the only one.

Two groups get the 60-day figure in Test B adjusted. An Indian citizen who leaves India during the year to take up a job abroad, or as crew on an Indian ship, has it raised to 182, so only Test A can catch them. An Indian citizen or person of Indian origin who lives abroad and visits India has it raised to 182 as well, unless their India income (everything other than foreign-source income) tops ₹15 lakh, in which case it is set at 120 days.

Who each residence rule applies to

Which version of the 60-day test applies to you depends on your citizenship and why you are in India. Four groups, four answers:

• Indian citizens leaving for a job abroad: if you leave India during the tax year to take up employment outside India, only the 182-day test applies for that year. Someone emigrating mid-year can stay a non-resident even after several months in India before departure.
• Crew of Indian ships: the same 182-day-only treatment applies to a citizen who leaves as a member of the crew of an Indian ship. Special rules, keyed to the Continuous Discharge Certificate, define exactly which days aboard count.
• Visiting NRIs and people of Indian origin: if you live abroad and come to India on a visit, the 60-day test relaxes to 182 days, unless your India income crosses ₹15 lakh, when it tightens to 120.
• Everyone else, including foreign nationals working in India: the plain 182-day and 60-plus-365 tests apply with no relaxation. A foreign national on a long India posting can become a resident faster than expected.

A salaried person posted to India, or a returning Indian, is judged on the same two tests; only the 60-day figure moves between groups.

The three residential statuses and what each is taxed on

Residence is not a yes-or-no answer. Individuals fall into one of three buckets, and each is taxed on a different slice of income: a resident and ordinarily resident (ROR) on worldwide income, a non-resident (NR) on Indian income only, and a resident but not ordinarily resident (RNOR) in between.

Indian income is always taxed, for all three. It means income received or deemed received in India, and income that accrues, arises or is deemed to accrue or arise in India: your India salary, rent from an Indian flat, interest from an Indian bank, capital gains on Indian shares.

Foreign income is where the three part ways. An ordinary resident pays Indian tax on all of it: a salary earned in Dubai, rent from a London flat, dividends from a US brokerage. A non-resident pays Indian tax on none of it. An RNOR pays on just one kind of foreign income, profits from a business controlled from India or a profession set up in India, and nothing else from abroad.

This is why residential status, not the size of the income, is often the first question an NRI's tax advisor asks. The NRI hub linked below carries the rates that apply once you land in the non-resident column.

RNOR: which foreign income escapes Indian tax

RNOR is the transition status between non-resident and full resident, and its value is simple: your foreign income, other than from an India-controlled business, stays out of Indian tax. A returning NRI is usually RNOR for the first two years back, sometimes three.

You are resident but not ordinarily resident if you are a resident under the day-count tests and also meet any one of these conditions:

The two core conditions (9-of-10 non-resident years, or 729 days or fewer in 7 years) cross-checked against published copies of the enacted Act.†

Deemed residency for high-income Indians taxed nowhere else

An Indian citizen can be a resident without setting foot in India for a single day. If your India income (everything other than foreign-source income) tops ₹15 lakh and you are not liable to tax in any other country by reason of domicile, residence or a similar criterion, Section 6 deems you a resident.

This rule, introduced in 2020 and carried into the 2025 Act, targets high earners who arrange their affairs to be tax-resident nowhere. It does not touch ordinary NRIs who pay tax where they live: a software engineer in the United States, taxed there, is unaffected however high their India income.

A deemed resident is always treated as RNOR, never ordinarily resident. So the rule does not reach out to tax their foreign income; it only pulls their India income (and any India-controlled business income) firmly into the Indian net and closes the resident-nowhere gap. "Not liable to tax" means genuinely outside another country's tax net, not merely paying nothing because of exemptions or a zero-rate regime.

Income from foreign sources means income that accrues or arises outside India, other than from a business controlled in or a profession set up in India, and is not deemed to accrue in India.

How to count your days in India

Count every day you are physically present in India, add them up across all your trips, and do it separately for each tax year. A handful of mechanics settle the close calls:

• Both ends count: the day you land in India and the day you leave both count as days of presence, following long-settled practice. On a tight count near 60, 120 or 182, a single arrival or departure day can flip your status.
• Presence, not purpose: a day in India counts whether you spent it working, on holiday, in hospital or stuck in transit. The reason for being here does not matter.
• Add up separate visits: the days need not be continuous. Four trips of 40 days each are 160 days, the same as one 160-day stay.
• Each tax year stands alone: your status is recomputed every year from 1 April to 31 March. Being resident one year does not carry into the next.
• Keep the evidence: passport entry and exit stamps, boarding passes and the immigration record are what prove your count if the department asks. For ship crew, the Continuous Discharge Certificate governs which days at sea are left out.

Edge cases: the ₹15 lakh trap, dual residency and the year you move

The rules bite hardest at the boundaries. The cases below catch people who assumed the simple 182-day line was the whole story.

The ₹15 lakh visitor trap: a well-off NRI who comes to India for family reasons can cross into residency at just 120 days once their Indian rent, interest and capital gains together top ₹15 lakh. Many discover this only after a long winter in India has already tipped them over.

Dual residency and the treaty tie-breaker: India's tests can make you a resident while another country's rules do the same, leaving you resident in both. A Double Taxation Avoidance Agreement (DTAA) then breaks the tie in a set order, looking first at where your permanent home is, then your centre of vital interests, then your habitual abode, then your nationality. You claim treaty residence with a Tax Residency Certificate from the other country plus Form 10F.

The year you leave or return: residency is all-or-nothing for a tax year, with no splitting the year in two. Leaving India for a job abroad partway through a year can keep you a non-resident for that whole year, using the 182-day relaxation; returning for good partway through can make you a resident (usually RNOR) for the whole year. Timing the move around 30 September, the rough midpoint of the 182-day count, is what decides which side of the line the year falls.

Who counts as a person of Indian origin: someone who, or whose parents or grandparents, was born in undivided India. The visiting-NRI relaxations use this definition, so many second-generation NRIs still qualify.

What your residential status changes on your tax return

Your status drives three things on the return: which income you must report, which disclosures you must make, and which ITR form you file.

Report the right income: an ordinary resident reports worldwide income; a non-resident and an RNOR report only what Indian tax reaches. The residential-status declaration is one of the first entries on the return, and a wrong tick here misstates everything downstream.

Foreign-asset disclosure: only a resident and ordinarily resident must fill Schedule FA, disclosing foreign bank accounts, overseas shares, property and other assets. Non-residents and RNORs are outside Schedule FA. Penalties for a missed foreign-asset disclosure under the black-money law are steep, so the line between RNOR and ordinary resident carries real weight.

Treaty relief and forms: to apply a DTAA rate, a non-resident needs a Tax Residency Certificate from their home country plus Form 10F. Which ITR form applies also shifts with status and income type; the form finder linked below keeps pace as the forms for the 2025 Act are notified.

How to plan your days around the 182 and 120-day lines

If your residency is a close call, the day count is a lever you can actually pull. The planning is legal and mechanical: stay on the right side of a specific number of days, and keep a running tally from 1 April.

• Visiting NRI with over ₹15 lakh of India income: treat 120 days as your ceiling, not 182. Reaching 120 makes you a resident (RNOR) and pulls the year's India income and any India-controlled business income into a resident computation. A long festive-season stay is the usual way people blow past it.
• Emigrating for a job: leave before you hit 182 days and you stay a non-resident for the whole departure year, so the foreign salary you earn after leaving pays no Indian tax. Around 30 September is the practical midpoint to plan against.
• Returning after years abroad: land after 1 October where you can. Staying 182 days or fewer keeps you a non-resident for the return year; and even past 182 days, the 9-of-10-years and 729-day tests hold you at RNOR, so your foreign income is still sheltered.
• Bank the RNOR years deliberately: a returnee typically gets two tax years where foreign income is untaxed in India. Selling overseas property, closing foreign accounts and booking overseas capital gains inside that window, rather than after you become an ordinary resident in year three, can save the full resident tax on that income.

Worked examples

Section 6 FAQs