Residential Status Under the Income-tax Act, 2025: 182 Days, 120 Days, and the Resident Who Never Came Home

Every December, the arrivals hall at an Indian airport fills with people coming home for the holidays. Software engineers from Seattle, nurses from Dubai, students from Melbourne, grandparents back from a long visit to their grandchildren in London. Almost none of them are thinking about section 6 of the Income-tax Act. All of them are adding days to it.

Residential status is the most consequential question in Indian tax that nobody asks until March. It decides whether India taxes a person's income from everywhere in the world, or only what arises here. From tax year 2026-27, the question is answered by section 6 of the Income-tax Act, 2025, and the answer comes down to a few numbers.

Three numbers

Under section 6(2), an individual is resident in a tax year if they are in India for:

• 182 days or more in the year; or
• 60 days or more in the year, and 365 days or more in the four years before it.

Then come the exceptions, and they are where most people live.

• Leaving India for work. For an Indian citizen who leaves India in the year for employment outside India, or as crew of an Indian ship, section 6(3) switches the 60-day test off altogether. Only 182 days can make them resident that year.
• Visiting. For an Indian citizen or a person of Indian origin who lives abroad and comes on a visit, section 6(4) switches the 60-day test off too, unless their total income, other than from foreign sources, exceeds ₹15 lakh. Then, under section 6(5), the 60 days in section 6(2)(b) become 120.

A person of Indian origin is someone who was born in undivided India, or whose parent or grandparent was, under section 2(78).

Resident without setting foot in India

Section 6(7) is the provision that surprises people most. An Indian citizen is deemed resident if:

• they are not liable to tax in any other country by reason of domicile, residence or similar criteria; and
• their total income, other than from foreign sources, exceeds ₹15 lakh.

No days are counted. A citizen working in a country that does not tax individuals on residence, with rent, interest and gains in India above ₹15 lakh, can be resident here without a single day's stay. Section 6(13)(c) then softens it: a deemed resident is always not ordinarily resident.

Resident, but not ordinarily

Being resident is not the end of the question. Section 6(13) makes a resident individual not ordinarily resident in three cases:

• they were a non-resident in nine of the ten tax years before; or
• they were in India for 729 days or less in the seven tax years before; or
• they are a citizen or person of Indian origin with more than ₹15 lakh of Indian income who became resident by spending 120 to 181 days in India.

And the deemed resident, as above.

The difference is large. Under section 5, a resident and ordinarily resident person is taxed on income from everywhere. A resident who is not ordinarily resident is taxed on foreign income only if it comes from a business controlled in, or a profession set up in, India.

For someone returning to India after years abroad, "not ordinarily resident" is often the most valuable status the Act has to offer, and the easiest to lose by counting days carelessly.

Work out your own

Companies, firms and everyone else

• A company is resident if it is an Indian company, or if its place of effective management is in India. Section 6(10) defines it: the place where key management and commercial decisions for the business as a whole are, in substance, made.
• An HUF, firm or association of persons is resident unless the control and management of its affairs is wholly outside India.
• Section 6(12) keeps an old rule: a person resident for one source of income is resident for all of them.

Proving it abroad

Treaty partners often ask an Indian resident for proof. Under rule 75(3) of the 2026 Rules, the application for a certificate of residence is now Form 42, and the certificate the Assessing Officer issues is Form 43. They replace Forms 10FA and 10FB. How a non-resident claims a treaty the other way round is in the companion article on treaties.

Before the holidays

• Count days from the passport stamps, not from memory. Arrival and departure days are where most disputes start.
• If you are a citizen living abroad, work out your Indian income, excluding income from foreign sources, against ₹15 lakh before booking a long visit.
• If you are returning for good, check the nine-in-ten and 729-day tests for the next two or three years, not only this one.
• If you are a citizen in a country that does not tax you on residence, look at section 6(7) before assuming you are a non-resident.

Where this comes from

Everything here is from sections 2, 3, 5 and 6 of the Income-tax Act, 2025 as amended by the Finance Act, 2026, which made no change to sections 5 and 6, and from rules 8 and 75 of the Income-tax Rules, 2026. Section 6 governs from tax year 2026-27, and earlier years are decided under the 1961 Act. For an individual, residence can turn on a single day, so the count should be checked against the documents.