Why your residential status decides what India taxes
Before an NRI can work out any Indian tax, one question has to be answered first: what is yourresidential status under Section 6 of the Income Tax Act? It is decided purely by day counts and history — not by citizenship, visa, or where your employer is — and it controls the scope of income India may tax. If you are NRI, India taxes only income that accrues or is received in India. If you are ROR (Resident Ordinarily Resident), India taxes your worldwide income, including foreign salary, rent and capital gains. RNORsits in between: a transitional status where foreign income generally stays outside Indian tax. Once you know your status here, the NRI income tax calculatorapplies the right scope and slabs for FY 2026-27.
The 182-day rule
The first and simplest test: if you are physically in India for 182 days or moreduring the financial year (1 April 2026 – 31 March 2027), you are resident for FY 2026-27. Both the day you land in India and the day you fly out count as days in India, per the CBDT's clarification. Crossing 182 days makes you resident regardless of any other factor — the remaining rules only matter when you are below it.
The 60 + 365 rule — and its two exceptions
Below 182 days, the second test applies: you are still resident if you spent 60 days or more in India during the FY and 365 days or more across the four preceding financial years (FY 2022-23 to FY 2025-26). Two groups get a relaxed version of this rule:
- Indian citizens leaving India for employment abroad, and crew of Indian ships:the 60-day threshold becomes 182 days — effectively only the 182-day rule applies, so the year you move abroad you typically become NRI from the day count alone.
- Indian citizens and PIOs visiting India: the 60-day threshold also becomes 182 days, protecting short visits. But if your Indian-source income exceeds ₹15 lakh, the threshold tightens to 120 days — a Finance Act 2020 change aimed at high-income visitors with significant economic ties to India.
Deemed residency — Section 6(1A)
Even if you fail both day-count tests, you can be deemed resident if all three hold: you are an Indian citizen, your Indian-source income exceeds ₹15 lakh, and you arenot liable to tax in any other country by reason of domicile or residence. This anti-abuse rule targets "stateless" tax arrangements where a person is resident nowhere. Two softeners: deemed residents are always RNOR (never ROR), so foreign income stays untaxed in India; and the rule only bites when you are not otherwise resident under the basic tests.
ROR vs RNOR — why RNOR matters
Being resident is not the end of the inquiry — Section 6(6) then asks how resident you are. You are RNOR if any of these hold: you were non-resident in 9 or more of the 10 preceding FYs; your total stay across the 7 preceding FYs is 729 days or less; you are a visiting citizen/PIO with Indian income above ₹15 lakh and 120–181 days in India; or you are a deemed resident. Otherwise you are ROR, and India taxes your worldwide income. The distinction is worth real money: an RNOR's foreign salary, US/UK rental income and overseas capital gains are generally not taxable in India (only income from a business controlled or profession set up in India is). Returning NRIs typically get a 2–3 year RNOR window — see theRNOR calculator for how long yours lasts.
Worked example
Priya, a software engineer, leaves India on 15 August 2026 to take up a job in the US. She is in India for 137 days in FY 2026-27 (1 April – 15 August, both days counted) and was in India the whole of the preceding four years — 1,461 days. Under the ordinary 60 + 365 rule she would be resident (137 ≥ 60 and 1,461 ≥ 365). But because she is an Indian citizen leaving India for employment abroad, the exception applies: only the 182-day test matters for her, and 137 < 182. Result: NRI for FY 2026-27 — her US salary for October–March is not taxable in India, though her Indian FD interest and any India-side rent remain taxable as Indian-source income.
Income-tax residency vs FEMA residency
A common confusion: FEMA (Foreign Exchange Management Act) has its own, separate definition of NRI based on your intention to stay outside India for an uncertain period — not a day count. FEMA residency decides banking rules: whether you must redesignate accounts as NRE/NRO and what deposits you may hold. Income-tax residency decides what gets taxed. The two can diverge in the same year, which is normal — handle each under its own law. For the banking side, see the NRE/NRO FD calculator; for tax on the income side, theNRI income tax calculator.