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Residential Status Under Income Tax Act, 1961 — Complete Guide [Section 6]

Your tax liability in India depends on your residential status — not your citizenship. Learn how ROR, RNOR, and NR are determined under Section 6, with rules for individuals, HUF, companies, and more.

—·6 min read
residential statusSection 6income taxNRIRORRNORHUFPOEMdeemed resident

Your tax liability in India does not depend on your passport — it depends on your residential status under Section 6 of the Income Tax Act, 1961. This status must be determined fresh for every financial year (previous year), and it decides whether your global income or only your India-sourced income is taxable here.

Part A — Individual

1. Three Categories of Residential Status

ROR
Resident and
Ordinarily Resident
RNOR
Resident but Not
Ordinarily Resident
NR
Non-Resident

2. Scope of Taxable Income by Status

Income Type ROR RNOR NR
India-sourced income ✔ Taxable ✔ Taxable ✔ Taxable
Foreign income — business controlled from India or profession set up in India ✔ Taxable ✔ Taxable (foreign-accruing portion only) ✘ Not taxable
All other foreign income ✔ Taxable ✘ Not taxable ✘ Not taxable
What does "income received/accrued or deemed to be received or accrued in India" mean? It covers two things: (1) Accrued/deemed to accrue in India = income earned from any source situated in India. (2) Received/deemed to be received in India = any other income received in India.

Step 1 — Resident vs Non-Resident [Section 6(1)]

An individual is treated as Resident in India if they satisfy any ONE of the following conditions:

General Condition — Applies to Any Individual
Condition 1

Period of stay in India during the previous year is 182 days or more.

Condition 2

Period of stay in India is 60 days or more in the previous year AND 365 days or more in the 4 years immediately preceding the previous year.

If neither condition is satisfied → the individual is a Non-Resident (NR).

Special Rules — Modified Conditions for Certain Individuals

A. Indian Citizen Leaving India for Employment or as Crew of Indian Ship [Explanation 1(a) & (b)]

Only Condition 1 applies — stay of 182 days or more makes them Resident.

Note for Crew Members: Periods during an eligible voyage are excluded from the computation of days of stay in India [Explanation 2 to Sec 6(1)], even if the ship is in Indian territorial waters.
B. Indian Citizen or Person of Indian Origin (PIO) Visiting India [Explanation 1(c)]

A person is of Indian Origin if they, or either of their parents or grandparents, was born in undivided India.

Sub-case 1: Income ≤ ₹15 lakhs (other than foreign sources)

Only Condition 1 applies — stay of 182 days or more makes them Resident.

Sub-case 2: Income > ₹15 lakhs (other than foreign sources)

Condition 1

Stay of 182 days or more → Resident

Modified Condition 2

Stay of more than 120 days but less than 182 days AND 365 days or more in the preceding 4 years → Resident

⚠️ Stay of exactly 120 days does NOT satisfy Modified Condition 2. The threshold is strictly more than 120 days.

Exception — Deemed Resident [Section 6(1A)]

An Indian citizen who satisfies ALL of the following is deemed Resident in India — even without any stay in India:

  1. Total income (other than from foreign sources) exceeds ₹15 lakhs during the previous year; AND
  2. Not liable to tax in any other country or territory by reason of domicile, residence, or any other similar criteria; AND
  3. Not Resident in India under the general conditions of Section 6(1).
Such a deemed resident is treated as RNOR — not ROR. PIO is not covered — this exception applies only to Indian citizens.

Step 2 — ROR vs RNOR [Section 6(6) / IT Act 2025: Sec 6(13)]

Once an individual qualifies as Resident, test BOTH additional conditions (expressed as positive equivalents of Sec 6(6)(a) and (b)):

A

Resident in India for at least 2 out of the 10 previous years immediately preceding the relevant previous year.

B

In India for 730 days or more during the 7 previous years immediately preceding the relevant previous year.

If BOTH conditions satisfied → ROR
If EITHER condition not satisfied → RNOR
Special RNOR Rule — Indian Citizen / PIO Visiting India [Sec 6(6)(c)]

If total income (other than foreign sources) > ₹15 lakhs AND stay in India is more than 120 days but less than 182 days AND 365 days or more in the preceding 4 years →

Deemed Resident (via modified Condition 2) and directly classified as RNOR. Conditions in Sec 6(6)(a) & (b) need not be tested.

Author's Summary Matrix — High-Income Indian Citizen / PIO

Stay in India (Previous Year) Income ≤ ₹15 lakhs Income > ₹15 lakhs
< 120 days NR NR
Exactly 120 days NR NR (>120 days not met)
121 – 181 days NR RNOR (via Sec 6(6)(c))*
182 days or more ROR / RNOR* ROR / RNOR*

* As per Sec 6(6)(a) & (b) tests. The 121–181 day RNOR classification also requires 365 days or more in the preceding 4 years.

Part B — HUF, Company, Firm, AOP, BOI & AJP

Assessee Type Resident in India Non-Resident in India
HUF If control and management of its affairs is situated (even partly) in India If control and management is situated wholly outside India
Firm / AOP / BOI / AJP (Artificial Juridical Person) If control and management of its affairs is situated (even partly) in India If control and management is situated wholly outside India
Indian Company Always a Resident in India — (cannot be NR)
Foreign Company If Place of Effective Management (POEM) is in India during the previous year If POEM is situated outside India
POEM defined: Place of Effective Management means the place where key management and commercial decisions necessary for the conduct of the business of an entity as a whole are, in substance, made.

Resident HUF — Further Classification into ROR / RNOR

A Resident HUF is ROR only if BOTH conditions below (with reference to its Karta) are satisfied:

A

Karta has been Resident in India for at least 2 out of 10 previous years immediately preceding the relevant previous year.

B

Karta has been in India for 730 days or more in the 7 previous years immediately preceding the relevant previous year.

If EITHER condition is not satisfied → HUF is RNOR.

Key Notes

1. Year-specific determination Residential status must be determined separately for each previous year. Status in one year has no bearing on the next.
2. Citizenship ≠ Residential Status An Indian citizen can be NR; a foreign national can be ROR. Citizenship is irrelevant under Section 6.
3. Double Taxation Relief (DTAA) Where an ROR has paid tax abroad on foreign income, credit is available u/s 90/91 where India has a DTAA with that country.
4. "Foreign sources" income defined Income which accrues or arises outside India — excluding income from a business controlled from India or a profession set up in India.
Definition — "Stay in India" [General Notes] Date of arrival in India counts. Date of departure from India counts. Stay need not be continuous. Includes stay in Indian territorial waters (within 12 nautical miles from the appropriate base line).
References: Section 6 of the Income Tax Act, 1961 | Explanations 1 & 2 to Sec 6(1) | Sec 6(1A) inserted by Finance Act, 2020 w.e.f. AY 2021–22 | Sec 6(6)(c) inserted by Finance Act, 2020
IT Act 2025 Ref: Section 6(7) corresponds to Sec 6(1A) | Section 6(13) corresponds to Sec 6(6) | Applicable from Tax Year beginning 1 April 2026