Indian Tax Residency and RNOR Status When You Move Abroad (2026)
Key takeaways
- Residential status is decided separately for each year on physical-presence tests in Section 6 of the Income-tax Act — citizenship and visa are irrelevant to it.
- Primary test: 182 days or more in India in the year makes you a resident; secondary test: 60 days in the year plus 365 days across the preceding four years also makes you a resident.
- The 120-day rule: for an Indian citizen or person of Indian origin whose Indian-source income exceeds ₹15 lakh, the 60-day figure in the secondary test drops to 120 days.
- Deemed residency (Section 6(1A)): an Indian citizen with Indian income over ₹15 lakh who is not liable to tax in any other country is treated as a resident (specifically as RNOR), targeting “stateless” tax residents.
- RNOR is a transitional status: your foreign income is generally not taxed in India, only your Indian income and income from a business controlled in India.
- The Income-tax Act, 2025 takes effect from 1 April 2026 and renames “previous year”/”assessment year” as a single “tax year”, but it carries the Section 6 residency and RNOR rules over unchanged. A DTAA resolves double taxation between India and your new country.
How India decides whether you are a resident
India does not tax by nationality. It taxes by residential status, and that status is recalculated every year from where you physically were. The rules live in Section 6 of the Income-tax Act, explained on the Income Tax Department’s portal. There are two basic tests, and satisfying either makes you a resident for that year:
- Test A (182-day test): you were in India for 182 days or more in the relevant year.
- Test B (60 + 365 test): you were in India for 60 days or more in the year and 365 days or more in the four years immediately preceding.
If you meet neither, you are a Non-Resident (NRI) for that year. For someone leaving India mid-year, Test A is what usually decides it: leave early enough in the tax year that your India-days fall below 182 and you are typically a non-resident from that year onward.
The 60-day relaxation — and the 120-day catch
The 60-day limb of Test B has historically been relaxed to 182 days for two groups: an Indian citizen who leaves India in that year for employment abroad (or as a crew member of an Indian ship), and an Indian citizen or person of Indian origin who is visiting India. This relaxation is what lets NRIs make long visits home without accidentally becoming resident.
However, a carve-out narrows that generosity. For an Indian citizen or PIO visiting India whose Indian-source income exceeds ₹15 lakh in the year, the relaxed threshold is 120 days, not 182. So a high-Indian-income NRI who spends 120 days or more in India (and 365+ over the prior four years) becomes a resident. Crucially, such a person is classified as RNOR rather than an ordinarily resident — so their foreign income still stays out of the Indian net even though they are technically “resident”. Watch your India-days carefully if your Indian rent, capital gains or business income is large.
Deemed residency under Section 6(1A)
Introduced to stop wealthy individuals from being tax-resident nowhere, Section 6(1A) deems an Indian citizen to be resident in India if their Indian-source income exceeds ₹15 lakh in the year and they are not liable to tax in any other country by reason of domicile, residence or similar criterion. This is aimed at “stateless” tax residents — people who arrange their days so as to be resident nowhere. Importantly, deemed residents are treated as RNOR, so the rule pulls Indian-source income and India-controlled business income into charge, not genuinely foreign income. If you move to a country that does tax you (as most do), Section 6(1A) will not apply to you.
RNOR: the valuable in-between status
Once you are a resident, Section 6 sub-divides you into Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR). You are RNOR for a year if either:
- you were a non-resident in 9 out of the 10 preceding years; or
- you were in India for 729 days or fewer across the 7 preceding years.
(Deemed residents under 6(1A) and the high-income 120-day visitors are also classed as RNOR.) Why does this matter so much? Because an ROR is taxed on worldwide income, whereas an RNOR is taxed only on Indian-source income and on income from a business controlled or profession set up in India — their genuinely foreign income (foreign salary, foreign interest, foreign rental) is not taxed in India. For someone returning to India after years abroad, RNOR typically lasts two to three years, a window in which you can bring back foreign earnings, close foreign accounts and reorganise investments with your overseas income shielded from Indian tax. It is one of the most useful planning features in the whole system, and it applies symmetrically to the year you emigrate and to your first years back.
The tax year, and the year you leave
India’s tax year — historically the “previous year” — runs from 1 April to 31 March, with tax on that income assessed in the following “assessment year”. Because status is fixed per year, the date within the year that you leave India can flip your status. Leave in, say, September and you may already have spent more than 182 days in India that year and be resident for the whole of it; leave earlier and you may be a non-resident for the entire year. Count your days deliberately around the 31 March boundary. Note that the Income-tax Act, 2025, effective 1 April 2026, replaces “previous year” and “assessment year” with a single “tax year” and renumbers much of the statute, but it retains Section 6 and the residency/RNOR tests unchanged — so the day-counts above continue to apply.
Avoiding double tax: the DTAA
If both India and your new country claim tax on the same income, a Double Taxation Avoidance Agreement (DTAA) between the two states decides which one taxes it, or gives a credit so you are not taxed twice. India has DTAAs with most major destination countries; the texts and a partner-country list are published by the Income Tax Department at its International Taxation / DTAA pages. To claim treaty benefits you typically need a Tax Residency Certificate (TRC) from your country of residence and to file Form 10F on the Indian e-filing portal. A common example: interest on your NRO account suffers TDS in India, but a DTAA may cap that rate and let you credit it against tax at home. Keep your TRC and Form 10F current each year you claim relief.
How Flyto can help
Flyto Relocation moves households from India to Europe and worldwide, door-to-door. While you time your departure around the 31 March tax boundary and organise your residency paperwork, Flyto handles the packing, freight, customs and delivery of your belongings. Get a quote.
Frequently asked questions
How many days in India make me a non-resident?
Fewer than 182 days in the tax year usually makes you a non-resident, provided you don’t also meet the 60-day-plus-365-day secondary test. Status is judged year by year under Section 6. See the Income Tax Department.
What is the 120-day rule?
For an Indian citizen or PIO visiting India whose Indian-source income exceeds ₹15 lakh, the secondary test uses 120 days instead of the usual 182-day relaxation — so 120+ days (with 365 over four years) makes them resident, but classified as RNOR. See the Income-tax Act, Section 6.
Does India tax my foreign salary after I move?
If you are a non-resident or RNOR, India taxes only your Indian-source income; your genuinely foreign income (like a foreign salary) is not taxed in India. Only an ordinarily resident is taxed on worldwide income. See the income-tax portal.
What is RNOR and how long does it last?
RNOR is a transitional resident status in which foreign income is not taxed in India. You qualify if you were non-resident in 9 of the past 10 years, or in India 729 days or fewer over the past 7 years — typically two to three years around a move. See Section 6 of the Income-tax Act.
Did the Income-tax Act, 2025 change the residency rules?
It renamed “previous year”/”assessment year” as a single “tax year” from 1 April 2026 and renumbered the statute, but the Section 6 residency and RNOR tests were carried over unchanged. See the Income Tax Department.
How do I avoid being taxed twice on the same income?
Use the relevant DTAA between India and your country of residence, supported by a Tax Residency Certificate and Form 10F, to claim exemption or a foreign-tax credit. See the DTAA pages.
Sources
- Income Tax Department — residential status and Section 6 (e-Filing portal)
- Income Tax Department — Income-tax Act, Section 6 (residence in India)
- Income Tax Department — Double Taxation Avoidance Agreements (DTAA)
- Income Tax Department — e-Filing portal (Form 10F, Tax Residency Certificate)
- Income Tax Department — foreign tax credit and international taxation
- Income Tax Department — tax calendar (1 April–31 March tax year)
- Income Tax Department — Finance Acts and the Income-tax Act, 2025
- Reserve Bank of India — FEMA (residency for exchange-control purposes)