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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11Possibly in India, abroad, or both: where you live or earn money does not by itself decide which country can tax it. India’s rules determine your Indian residential status separately for each tax year, and that status can affect how much of your income is within India’s tax net. The income’s source and receipt, the other country’s rules, any tax treaty and possible foreign-tax relief also matter.
Start with the tax year: which Indian law applies?
For a tax year beginning before 1 April 2026, the Income Tax Department says residential status is determined under section 6 of the Income Tax Act, 1961. A tax year beginning on or after 1 April 2026 is governed by the Income Tax Act, 2025. The Department’s Non Resident FAQs say the basic individual residence tests did not change under the new Act.
The date a return or assessment happens does not, by itself, move an earlier tax year under the 2025 Act. Determine status for the particular year in question; earlier years may still matter for that year’s look-back tests. The figures below are the Department’s published tests for AY 2026–27 under the 1961 Act, and should not be applied without checking the law and guidance for the relevant year.
How India decides an individual’s residential status
For AY 2026–27, the Income Tax Department’s guidance on non-resident individuals describes two main day-count tests under the 1961 Act. Subject to the exceptions below, an individual is resident in India if either test is met:
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- They were in India for at least 182 days during the relevant previous year; or
- They were in India for at least 60 days during that year and at least 365 days in total during the four immediately preceding years.
Someone who meets neither test is generally non-resident for that year, subject to the statutory rules. Count days for the relevant year and, where required, the preceding four years; do not assume that a visa, home address, citizenship or the place an employer is based settles the Indian test.
Exceptions for some citizens and visitors
The ordinary 60-day threshold is modified for specified cases. The Department’s AY 2026–27 guidance describes a 182-day threshold for certain Indian citizens leaving India for overseas employment or as a ship crew member, and for Indian citizens or persons of Indian origin visiting India. A different 120-day threshold can apply to qualifying Indian citizen or person-of-Indian-origin visitors whose income other than income from foreign sources exceeds ₹15 lakh, when the stated four-year day-count condition is also met. These are specific exceptions, not alternative rules that apply to every traveller; check the exact conditions against the person’s facts and the law for that year.
A deemed-resident rule that is not based on days
The Department’s Non Resident FAQs also describe a rule for an Indian citizen with qualifying income above ₹15 lakh who is not liable to tax in another country or territory by reason of domicile, residence or a similar criterion. That person may be deemed resident in India. This is a separate rule, not simply another way of counting days. Whether it applies depends on the statutory conditions and the person’s circumstances.
Resident, RNOR and non-resident are different categories
Meeting a residence test does not always mean the person is “resident and ordinarily resident.” Indian rules distinguish a resident and ordinarily resident (ROR), a resident but not ordinarily resident (RNOR), and a non-resident. RNOR is a resident category of its own, not another term for non-resident.
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|---|---|---|
| Resident and ordinarily resident (ROR) | First meet the applicable residence test for the year and then assess whether the RNOR rules apply. | The ITR-2 manual says Schedule FA covers foreign assets or income from sources outside India. The manual extract does not set out every taxability rule for each income type. |
| Resident but not ordinarily resident (RNOR) | A resident may qualify under a look-back test or specified additional circumstances. | The ITR-2 manual says the cited foreign-asset disclosure for RNORs is limited to assets located in India. This reporting instruction alone does not decide whether an income item is taxable. |
| Non-resident | Generally, neither main residence test is met, subject to exceptions and the separate deemed-resident rule. | The ITR-2 manual says the cited foreign-asset disclosure for non-residents is limited to assets located in India. This does not settle the tax treatment of every income item. |
When a resident is RNOR
The Income Tax Department’s Non Resident FAQs describe two look-back tests: non-residence in nine out of the ten preceding years, or presence in India for no more than 729 days during the seven preceding years. The Department says these criteria continue under the 2025 Act. The notified 2026 return form also reflects additional specified RNOR circumstances, including circumstances involving certain qualifying visitors and deemed-resident citizens. Check the form and statutory rules that apply to the relevant year rather than treating the two look-back tests as exhaustive.
Does foreign income become taxable in India?
Residential status is an important part of the answer, but it does not settle the treatment of every payment. For each income item, establish what it is, where it arose or accrued, where it was received, and the applicable rule for that year. The scope of income potentially taxable in India can differ by status, while particular income categories can have their own rules. The official guidance cited here does not reproduce the complete statutory treatment of every kind of income, receipt or accrual, so a blanket rule such as “all foreign income is tax-free for non-residents” or “all foreign income is taxable for every resident” is not a safe conclusion from status alone.
A second country may also regard you as resident under its domestic law or tax income sourced there. If both countries’ rules reach the same income, check the relevant double-taxation agreement, if one applies, and the rules for foreign-tax relief. The Income Tax Department’s ITR-2 manual discusses relief for tax paid outside India, but eligibility and the amount depend on the applicable provisions and facts. Relief should not be assumed merely because tax was paid abroad.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Taxability, return disclosure and foreign-tax relief are separate questions
The Income Tax Department’s ITR-2 online manual describes Schedule FA as covering details of foreign assets or income from sources outside India. For the cited asset disclosure, it instructs non-residents and RNORs to report only assets located in India. The return form and instructions relevant to the filing year should be checked for the person’s status and filing circumstances.
- Taxability: Is this particular income chargeable to Indian tax under the rules for the year?
- Disclosure: Does the applicable return require reporting the income or an asset, even if the reporting question is distinct from whether tax is due?
- Relief: Can tax paid to another country be credited or relieved under the applicable Indian rules or treaty?
These questions are connected but not interchangeable. The Foreign Assets Disclosure Scheme manual discusses foreign income in the context of that scheme; its specific conditions should not be treated as the ordinary tax rule for all taxpayers.
What to gather before deciding where you owe tax
- Identify the exact tax year. Note whether it begins before or on/after 1 April 2026, so you use the correct Act and year-specific return instructions.
- Build a day-count record. Record days in India for the relevant year and, where relevant, the four-year and seven-year look-back periods, plus the ten-year residence history.
- Check any special status conditions. Note Indian citizenship or person-of-Indian-origin status, overseas employment or ship-crew circumstances, qualifying income excluding foreign-source income where relevant, and whether another country treats you as liable to tax on a residence-like basis.
- List income item by item. For each item, record its type, where it arose or accrued, where it was received, and any tax already paid abroad.
- Check the other country and treaty position. Determine whether that country also taxes the income or treats you as resident, then review the applicable agreement and foreign-tax relief rules.
- Check the correct return instructions. Separate what must be disclosed from what is taxable, using the form and guidance for the filing year.
The Income Tax Department’s Non Resident FAQs, AY 2026–27 non-resident guidance, ITR-2 online manual and notified 2026 return form provide the official rules and filing context summarized here. Tax law and return instructions can change; apply the provisions in force for the specific tax year.
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