What is Residential Status for determining income tax liability ?

Residential status refers to a person’s classification under Indian tax law based on how long they’ve stayed in India during a financial year. It’s not the same as citizenship—even a foreign national can be considered a resident for tax purposes, and an Indian citizen may be classified as a non-resident.

How Is It Determined?

Under Section 6 of the Income Tax Act 1961, individuals are categorized into:

• Resident and Ordinarily Resident (ROR)
• Resident but Not Ordinarily Resident (RNOR)
• Non-Resident (NR)

To determine this, the law looks at:

• Number of days stayed in India during the financial year (April 1 to March 31)
• Stay in previous years (for RNOR/ROR classification)

• Basic conditions to determine residential status :

Category	Criteria
Resident	Stayed ≥182 days in India during the year OR ≥60 days in the year AND ≥365 days in the past 4 years
RNOR	Resident but stayed <730 days in past 7 years OR was NR in 9 out of last 10 years
NR	Does not meet the above conditions

How It Affects Tax Liability

Residential status determines how much of the income is taxable in India:

Status	Taxable Income in India
ROR	Global income (India + abroad)
RNOR	Income earned or received in India + income from business/profession controlled from India
NR	Only income earned or received in India

Example:
If  an Indian citizen working abroad and spend less than 182 days in India, he/she may be classified as a Non-Resident, and only his/her Indian income will be taxed.