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Residential Status & NRI Taxation under the Income-tax Act, 2025

How your residential status (resident, RNOR or non-resident) is determined and what income each is taxed on in India — the foundation of NRI taxation.

Your residential status decides how much of your income India can tax — this is the foundation of NRI taxation, set by sections 5 and 6 of the Income-tax Act, 2025.

  • Residents are taxed on their global income.
  • Non-residents (NRIs) are taxed only on income received or arising in India.
  • Not-ordinarily-resident (RNOR) is an in-between status where most foreign income stays out of the Indian net.

Status is decided each year by day-count tests in Section 6 (182 days, or 60 days + 365 over four years), with special carve-outs for Indian citizens working abroad, and a "deemed resident" rule for high-income Indian citizens not taxed anywhere.

Sections in this topic

§4
Section 4 of the Income-tax Act, 2025 — Charge of Income-tax (and How It Applies to NRIs)
Charge of Income-tax
§5
Section 5 of the Income-tax Act, 2025 — Scope of Total Income: What India Taxes for Residents, RNOR and NRIs
Residents are taxed on worldwide income; non-residents only on Indian income; RNOR on Indian income plus foreign income...
§6
Section 6 of the Income-tax Act, 2025 — Residence in India: How Your Tax Residential Status Is Decided
The day-count tests for residence — 182 days, or 60 days plus 365 over four years — with relaxations for Indians working...
§7
Section 7 of the Income-tax Act, 2025 — Income Deemed to Be Received & Dividend Deemed to Be Income
Income deemed to be received and dividend deemed to be income in a tax year
§8
Section 8 of the Income-tax Act, 2025 — Income on Receipt of Capital Asset or Stock-in-Trade by a Specified Person from a Specified Entity (Dissolution or Reconstitution of a Firm/AOP/BOI)
Specified entity
§9
Section 9 of the Income-tax Act, 2025 — Income Deemed to Accrue or Arise in India (NRI Taxation)
Income deemed to accrue or arise in India

Key rules, limits & exemptions

⚖️
Resident vs RNOR vs Non-resident — who pays tax on what
A quick comparison of the three statuses and the income each is taxed on in India.

Frequently asked questions

What income does an NRI pay tax on in India?
Only income received or deemed received in India, or that accrues/arises or is deemed to accrue in India (Section 5(2)) — for example rent, capital gains on Indian property, and Indian interest.
How is residential status decided?
By the day-count tests in Section 6 — 182 days in the year, or 60 days in the year plus 365 days over the preceding four years, with carve-outs for Indians working abroad.
Disclaimer: Educational overview of the Income-tax Act, 2025 (effective 1 April 2026), not professional advice. Confirm your position with our team before acting.

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§4 — Section 4 of the Income-tax Act, 2...§5 — Section 5 of the Income-tax Act, 2...§6 — Section 6 of the Income-tax Act, 2...§7 — Section 7 of the Income-tax Act, 2...§8 — Section 8 of the Income-tax Act, 2...§9 — Section 9 of the Income-tax Act, 2...

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