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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.

An Indian citizen whose income other than foreign-source income exceeds fifteen lakh rupees in a tax year is DEEMED resident in India if they are not liable to tax in any other country or territory by reason of domicile, residence or any similar criterion. The day count is irrelevant to this route. It exists to catch Indian citizens resident in zero-tax jurisdictions, which makes it directly relevant to the Gulf: an Indian citizen in the UAE with substantial Indian income can be swept in on no days in India at all.

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.

A Non-Resident is taxed in India only on income that accrues, arises or is received in India. A Resident but Not Ordinarily Resident is taxed on Indian income and additionally on foreign income derived from a business controlled in or a profession set up in India — but foreign income generally stays outside the Indian net. A Resident and Ordinarily Resident is taxed on worldwide income. This is why the deemed-residency rule stings less than it first reads: a deemed resident is not ordinarily resident, so India taxes the Indian income it was already reaching, not the salary earned abroad.

The Income-tax Act 2025 is in force from 1 April 2026 and renumbered much of the statute, but residence remained at Section 6. Its subsections did move: deemed residency went from s.6(1A) to s.6(7), and the not-ordinarily-resident definition from s.6(6) to s.6(13). The special NRI taxation provisions moved wholesale — former sections 115C to 115H are now sections 213 to 217. The Act also replaces 'previous year' and 'assessment year' with a single 'tax year'. Residential status for any tax year beginning before 1 April 2026 continues to be determined under the 1961 Act even if assessed later, so both numbering systems remain live for some time.