Four Residencies, One Calendar

An individual meets the Substantial Presence Test for a calendar year if they were physically present in the United States on at least thirty-one days during the current year, AND on at least one hundred eighty-three days across a three-year period counting: all the days present in the current year, one-third of the days present in the first preceding year, and one-sixth of the days present in the second preceding year. Both conditions must be satisfied — thirty-one current-year days alone is not enough, and a large weighted total does not count if the current year falls under thirty-one days.

A person is treated as present in the United States on any day they are physically present in the country at any time during that day; a few hours counts as a full day. Four categories of day are excluded: days commuting to work from a residence in Canada or Mexico where the person regularly commutes; days in the United States for less than twenty-four hours while in transit between two places outside it; days present as a crew member of a foreign vessel; and days unable to leave because of a medical condition that developed while in the United States. A layover on the way to somewhere else generally does not count — a weekend visit does.

The Substantial Presence Test is only one of two routes to US tax residency. A lawful permanent resident — a green-card holder — is a US tax resident under the separate Green Card Test regardless of how few days they spend in the United States, until that status is formally abandoned or revoked. Running a day count is therefore pointless for a green-card holder: the answer is already yes, and the foreign-account and foreign-gift filings apply.

An individual is resident in India for a tax year if either test is met: present in India for a total of one hundred and eighty-two days or more in that tax year; OR present for sixty days or more in that year AND three hundred and sixty-five days or more across the four preceding years. The second test is the one that surprises people — a habit of long annual visits can make someone resident on a stay far shorter than six months. These basic conditions were carried into the Income-tax Act 2025 unchanged.

For an Indian citizen who leaves India in a tax year for the purpose of employment outside India, or as a member of the crew of an Indian ship, the sixty-day limb is replaced by one hundred and eighty-two days. In practice this means only the one-hundred-and-eighty-two-day test can make them resident that year — the long-recent-history route is switched off for the year of departure. This is the provision that protects someone who moves abroad mid-year after having lived in India for years.

An Indian citizen or person of Indian origin who, being outside India, comes on a visit to India also gets the sixty-day limb relaxed — but only to one hundred and eighty-two days where their income other than foreign-source income is fifteen lakh rupees or less. Where that Indian income EXCEEDS fifteen lakh rupees, the relaxation is only to one hundred and twenty days. A visitor in that income band who stays a hundred and twenty days or more, with three hundred and sixty-five days across the preceding four years, becomes resident.

A resident is 'not ordinarily resident' for a tax year if they were a non-resident in India in nine out of the ten preceding tax years, OR were in India for seven hundred and twenty-nine days or less across the seven preceding tax years. Two further categories are treated as not ordinarily resident: an Indian citizen or person of Indian origin with Indian income above fifteen lakh rupees who was present a hundred and twenty days or more but less than a hundred and eighty-two days, and an individual who is a deemed resident. This is the status most people returning to India after years abroad land in first.

The Liberalised Remittance Scheme is available to all resident individuals, minors included, with a guardian countersigning a minor's declaration. It is NOT available to persons resident outside India, and it is not available to corporates, partnership firms, Hindu Undivided Families or trusts. An NRI looking for their remittance route is looking at the NRO rules below, not at this one — the two are frequently confused because both are described loosely as 'sending money out of India'.

The Liberalised Remittance Scheme keys off being a person RESIDENT IN INDIA under the foreign exchange law, and NRO repatriation off being a person resident OUTSIDE India. That status is a foreign-exchange concept driven by where you live and why. It is not your citizenship — an Indian citizen abroad is generally not a FEMA resident — and it is not the same test as income-tax residency, which counts days under the Income-tax Act and can give a different answer for the same year. Three separate concepts, routinely treated as one, with opposite consequences for which limit applies to you.

The estate tax rules for a 'nonresident not a citizen' turn on domicile: broadly, living somewhere with no present intention of leaving. That is a subjective, facts-and-circumstances question about intent and ties, and it is NOT the Substantial Presence Test that decides income tax residency. The two can disagree for the same person in the same year: someone who is a US tax resident by day count may still not be domiciled here, and someone on a long-term visa who has built a life here may be domiciled even while intending to return one day. Nothing on this page can settle which you are.