Tax Residency Tests in India (NRI, RNOR, ROR): A Clear Guide for Global Indians

Quick answer: Your tax residency in India—Non-Resident (NR), Resident but Not Ordinarily Resident (RNOR), or Resident & Ordinarily Resident (ROR)—depends mainly on days spent in India and a few special rules for Indian citizens/PIOs and high-income visitors. RNOR is a middle status: taxed on Indian income and only specific foreign income. Getting this right drives your tax scope, DTAA relief, and disclosure duties. (Press Information Bureau) 

Why this matters 

Your residential status decides: 

• What is taxed (India-only vs global income), 

• Whether you must disclose foreign assets (Schedule FA), 

• How DTAAs resolve dual residency. 

Errors here are among the most common ITR issues for NRIs/returning Indians. 

The three statuses at a glance 

• NR (Non-Resident): India taxes only India-sourced income.  

• RNOR (Resident but Not Ordinarily Resident): India taxes Indian income plus foreign income only if it’s from a business controlled from India or a profession set up in India. Global passive income generally not taxed in India.  

• ROR (Resident & Ordinarily Resident): Taxed on worldwide income; full foreign asset disclosure applies.  

Step 1 — Are you Resident or Non-Resident for the year? 

You are Resident in India if either condition is met (Section 6): 

1. ≥182 days in India during the financial year, or 

2. ≥60 days in India during the year and ≥365 days in the 4 preceding years. 
   Special concessions modify “60 days” for certain Indian citizens/PIOs (see below). (Income Tax India) 

Important special rules (Finance Act, 2020) 

• Indian citizen/PIO visiting India with Indian income > ₹15 lakh: “60 days” becomes 120 days (plus ≥365 days in the prior 4 years) to be Resident. (Income Tax India) 

• Deemed Resident (sec. 6(1A)): An Indian citizen with Indian income > ₹15 lakh who is not liable to tax in any other country is deemed Resident in India (anti-abuse). (Income Tax India, Press Information Bureau) 

Note: The government clarified that deemed residency does not tax bona fide foreign earnings unless linked to an Indian business/profession. (Press Information Bureau) 

If you do not meet a Resident condition, you are NR for that year.  

Step 2 — If Resident, are you RNOR or ROR? 

A Resident individual is RNOR if any one applies (sec. 6(6), as amended): 

1. Non-resident in 9 out of 10 preceding years, or 

2. Stayed in India ≤729 days during the 7 preceding years, or 

3. Indian citizen/PIO visiting India with Indian income > ₹15 lakh and stay 120–181 days, or 

4. Deemed Resident under 6(1A) (Indian income > ₹15 lakh and not liable to tax elsewhere).  

If none of the above RNOR tests apply, you are ROR.  

What gets taxed under each status? 

Scope of income (Section 5; CBDT tutorial table): 

• ROR: Taxed on all income—received, accrued/deemed anywhere worldwide. 

• RNOR: Taxed on India-sourced income and foreign income only if from a business controlled from India or profession set up in India; other foreign income is not taxed. 

• NR: Taxed on India-sourced income only.  

Schedule FA (foreign assets) and other disclosures 

• Schedule FA in ITR-2/3 is not required if you are NR or RNOR. The Income Tax portal’s ITR-2 help explicitly says: “This schedule need not be filled up if you are Not Ordinarily Resident or a Non-Resident.” (Income Tax Department) 

• Resident schedules for foreign source income (FSI) and tax relief (TR) are also framed for residents. In ITR-3, Schedule TR is “available only in case of resident”.  

Fast decision cheat-sheet (featured snippet) 

Check your days in India (include arrival and departure days): 

1. ≥182 days → Resident 

2. Else if ≥60 days (or ≥120 days for high-income visiting Indian citizen/PIO) and ≥365 days in preceding 4 years → Resident 

3. Otherwise → NR 
   If Resident: 

• If any RNOR test true (9/10 non-resident or ≤729 days in 7 years or 120–181 days high-income visitor or Deemed Resident) → RNOR 

• Else → ROR (Income Tax India) 

Practical Indian scenarios (with outcomes) 

1. UAE-based Indian citizen with ₹20 lakh Indian capital gains; stays 130 days in India; is tax resident of UAE 

• Resident test: 120-day rule + prior 4 years test can trigger residency; RNOR carve-out applies for 120–181 days high-income visitor → RNOR. India taxes Indian gains; typical foreign salary/passive income stays out (unless business controlled from India). Schedule FA not required.  

2. Consultant returns to India after many years abroad; stays 200 days this year, but only 400 days in last 7 years 

• Resident (≥182 days); RNOR because ≤729 days in preceding 7 years → RNOR first year (possibly 2–3 years depending on day counts).  

3. “Nowhere taxed” Indian citizen with ₹25 lakh Indian income, living in a no-tax country and not tax-resident anywhere 

• Deemed Resident (6(1A)) → by law treated Resident and, per statute/CBDT, taxed only on Indian income unless linked to Indian business/profession; typically RNOR under sec. 6(6). (Income Tax India, Press Information Bureau) 

Dual residency & DTAA “tie-breaker” 

If you are resident under both India and another country’s domestic rules, most DTAAs apply a tie-breaker sequence under Article 4(2): 

1. Permanent home, then 

2. Centre of vital interests, then 

3. Habitual abode, then 

4. Nationality, then competent authority agreement if needed. (OECD) 

Computation notes & quick formulas 

• Day-count: Count each day you are physically in India; both arrival and departure days generally count. Keep your passport movement log aligned with immigration stamps and boarding passes (helpful during scrutiny). (Practice reflected in government tutorials.)  

• Simple residency check (illustrative): 

• Let D = India days in FY. 

• Let D4 = India days in last 4 FYs; D7 = last 7 FYs. 

• Resident if [D ≥ 182] OR [D ≥ 60 (or 120 for high-income visiting Indian citizen/PIO) AND D4 ≥ 365]. 

• RNOR if Resident AND [(NR in 9/10 yrs) OR (D7 ≤ 729) OR (high-income 120–181 days visitor) OR (Deemed Resident 6(1A))]. (Income Tax India) 

Compliance checklist (India-centric) 

• Keep a residency worksheet with annual totals and 4-year/7-year running sums. 

• Tag your status in ITR (Part A—General) and pick the correct conditions (ITR-3 & ITR-2 capture these explicitly).  

• RNOR/NR: Skip Schedule FA; ROR: fill Schedule FA, and use FSI/TR for foreign income and relief. (Income Tax Department) 

• DTAA proof: Obtain a Tax Residency Certificate (TRC) from the treaty country when claiming treaty benefits. (Tie-breaker often hinges on such documentation.) (IRS) 

Common pitfalls 

• Assuming 182 days is the only test. The 60 + 365 (or 120 + 365 for certain cases) rule changes outcomes for frequent visitors. (Income Tax India) 

• Over-disclosing as RNOR/NR. Schedule FA is not for RNOR/NR—avoid unnecessary foreign asset disclosures. (Income Tax Department) 

• Ignoring the “liable to tax” concept. Deemed residency targets those not liable to tax anywhere, not bona fide expats with foreign tax residency. (Press Information Bureau) 

FAQs 

Q1. What is the “₹15 lakh rule”? 
If your Indian income (excluding foreign-source income) exceeds ₹15 lakh, and you’re an Indian citizen/PIO visiting India, the 60-day test becomes 120 days; 120–181 days plus 365 in preceding 4 years can make you Resident (RNOR). Separately, if you’re an Indian citizen not liable to tax in any country, you can be a Deemed Resident. (Income Tax India) 

Q2. As RNOR, do I pay tax on foreign dividends or overseas salary? 
Generally no, unless the income is from a business controlled from India or profession set up in India; India-sourced income remains taxable.  

Q3. Do RNOR/NR individuals file Schedule FA? 
No. The Income Tax portal guide states Schedule FA “need not be filled up” by NOR (RNOR) or Non-Resident filers. (Income Tax Department) 

Q4. What if I’m resident in both India and, say, the US? 
Apply the DTAA tie-breaker (permanent home → vital interests → habitual abode → nationality → authorities). Keep a TRC and documentation ready. (OECD, IRS) 

Key takeaways 

• Count your days and apply the right exception; many high-income visitors fall into RNOR (not ROR). (Income Tax India) 

• RNOR is powerful for returnees: Indian income taxed; much foreign income stays outside Indian tax unless linked to Indian business/profession.  

• Disclosures differ: ROR must complete Schedule FA; RNOR/NR generally do not. (Income Tax Department) 

• DTAA can resolve dual residency—plan documentation early (TRC, abode, home, family/economic ties). (OECD) 

Sources & references 

Core rules and examples are drawn from the Income Tax Department’s official materials (residency tutorial “as amended by Finance Act, 2025,” residency page, ITR forms/help), plus the PIB clarification on the deemed resident rule: (Income Tax Department, Press Information Bureau)