Residential status, the single number that controls your tax.

Section 6(1): an individual is Resident in India in a financial year if they satisfy either of the two basic tests:

1. 182-day test: physical presence in India for 182 days or more in the financial year.
2. 60/365-day test: physical presence of 60 days or more in the current financial year AND 365 days or more cumulative in the preceding 4 financial years.

If NEITHER is met, the individual is Non-Resident (NRI).

Section 6(6): a Resident is further categorised as RNOR (Resident but Not Ordinarily Resident) if either:

• Non-resident in India in 9 out of the 10 preceding financial years, OR
• Physical presence in India for 729 days or less during the 7 preceding financial years.

Residents who do not meet the RNOR carve-outs are Resident and Ordinarily Resident (ROR).

Section 6(1)(c) Explanation modifies the 60-day test for two specific categories of Indian citizens:

• Indian citizen or person of Indian origin visiting India: the 60-day threshold becomes 182 days (so this group is harder to make Resident). From AY 2021-22, if their total Indian-source income exceeds INR 15 lakh, the threshold is 120 days instead of 182.
• Indian citizen leaving India for employment abroad or as crew of an Indian ship: the 60-day threshold becomes 182 days.

Why: these carve-outs give Indian passport holders moving abroad for employment, or visiting India for short trips, a wider buffer before Residence attaches. Without the carve-out, a 60-day visit home would trigger Residence (given the 365-day preceding lookback is easy to meet for anyone with India ties).

Finance Act 2020 introduced Section 6(1A): an Indian citizen whose Indian-source income exceeds INR 15 lakh in a financial year is deemed to be a Resident of India if they are not liable to tax in any other country or territory by reason of domicile or residence.

This is the 'stateless Indian' rule. It targets Indian citizens living in zero-income-tax jurisdictions (historically UAE pre-2023, Bahrain, Monaco) who had no residence anywhere — India now claims them as Resident.

Post-2023 UAE Corporate Tax: UAE residents who are subject to UAE Corporate Tax are now 'liable to tax' in UAE and escape Section 6(1A). Pure UAE-individual-tax-free status is still at risk; UAE tax-residence certificate helps.

Section 6(1A) resident is treated as RNOR by default (Section 6(6)(d)), so worldwide income is NOT taxed in India — only India-source income is taxed, same as NRI. The 'deemed resident' label mainly affects return-filing obligations and specific sections.

Case 1: Dubai-based Indian executive, visits India for 50 days each year, has been in UAE for 6+ years.

• Current year presence: 50 days.
• 182-day test: not met (50 < 182).
• 60/365-day test (Indian citizen abroad): modified to 182 days — not met.
• Status: Non-Resident (NRI).
• Indian tax: India-source income only.

Case 2: Indian citizen moved to US on H-1B 3 years ago, visits India for 85 days (long vacation).

• Current year presence: 85 days.
• 182-day test: not met.
• 60/365-day test for Indian citizen leaving for employment: modified to 182 days — not met.
• Status: NRI.

Case 3: Permanent return to India after 8 years in UAE, arrives mid-November.

• Current year presence: ~135 days (Nov to Mar).
• 182-day test: not met (135 < 182).
• 60/365-day test: 135 days > 60. Preceding 4 years cumulative: minimal visits, say 100 days. 100 < 365 — test not met.
• Status: still NRI for this year.
• Next year: full 365 days in India — Resident. 10-year lookback: non-resident in 8+ of past 10 years — passes RNOR carve-out. Status: RNOR for 2-3 years before transitioning to ROR.

• Not maintaining day-count log. Years later, when questioned, the taxpayer cannot prove non-presence. Keep a dated passport-stamp log year by year.
• Confusing arrival/departure day inclusion. Both arrival and departure days are counted as presence in India. A one-day business trip = 1 day. A 10-day round trip = 10 or 11 days depending on arrival/departure timing.
• Thinking NRI = tax-free in India. NRI is taxed on India-source income — Indian salary paid by Indian employer (regardless of where work was done), Indian rental, Indian capital gains, Indian dividends, NRO interest.
• Missing RNOR window on return. The 2-3 year RNOR transition is the single most tax-efficient window to sell foreign assets, convert IRAs/401(k)s, close out foreign business. Returning CFOs often learn about it too late.
• Ignoring Section 6(1A) deemed residency. UAE / Bahrain / Monaco-based Indians with INR 15 lakh+ Indian income now need to check it annually.