NRI
NRI tax residency in FY 2025-26: the rules that trip most people
The 120-day rule, RNOR status, and how Indian-source income is taxed. What NRIs returning to India — or visiting long — must plan for.
NRI tax residency has three tests, and most people know only one. Getting it wrong flips your entire tax exposure in India.
The basic 182-day test
You're a resident if you're in India for 182+ days in the FY. Simple.
The 120-day trap
If your Indian-source income exceeds ₹15L in a year, the threshold drops to 120 days (with 365+ days over the past 4 years). This catches a lot of NRIs on extended India visits.
Deemed resident (section 6(1A))
An Indian citizen with Indian-source income above ₹15L, not taxed anywhere else, is deemed resident regardless of days. Common trap for UAE-based NRIs.
RNOR — the sweet spot for returning NRIs
If you're returning permanently, planning your first 2 years as RNOR (Resident but Not Ordinarily Resident) keeps your foreign income out of Indian tax. This requires careful calendar management — get it wrong by 5 days and you lose lakhs.
If you're moving countries or planning a long India visit this year, model it before you book flights, not after.