India’s tax residency rules for individuals are subject to a detailed and multi-layered framework, especially relevant for the 2025 assessment year. This article offers a precise overview of India’s complete individual tax residency criteria and how they apply based strictly on the official guidelines and available figures.
Core Tax Residency Rules in India (2025)
India determines individual tax residency primarily on the number of days present within the country. The relevant thresholds and supplementary rules are clearly defined in the tax code and are summarized below for easy reference.
| Condition | Presence Requirement (Days) | Additional Criteria | Notes |
|---|---|---|---|
| General Tax Residency | 182 days or more | In the tax year | Individual is a tax resident |
| Alternative Rule for Extended Stay | 60 days in the tax year and 365 days aggregate in 4 preceding years |
Both conditions must be met | Individual is a tax resident |
| Visiting Indian citizens/Persons of Indian Origin (with India-sourced income > ₹1.5 million) |
120 days in the tax year and 365 days aggregate in 4 preceding years |
Applies since 1 April 2020 | Only where income from Indian sources exceeds threshold |
| Indian citizens leaving for employment/ship crew | 182 days or more in the tax year | Departure for employment or as crew | Otherwise considered non-resident |
| Indian citizens not liable to tax elsewhere (Income > ₹1.5 million) | Not specified | Not liable to tax in any other country | Deemed resident regardless of presence |
Explanation of Key Rules
- 182-Day Rule: Anyone present in India for at least 182 days in a financial year (April–March in India) is treated as a tax resident for that year.
- Extended Stay Rule (60/365): If present in India for 60 days in the relevant tax year and 365 days in the previous four years combined, you are classified as a resident. This plays a crucial role for returning expatriates or frequent visitors.
- Special 120-Day Rule: Since 1 April 2020, Indian citizens or Persons of Indian Origin (PIOs) with Indian-source income over ₹1.5 million (about $18,000 at ₹83/USD) may qualify as residents with just 120 days of presence, provided the aggregate 365-day rule is met.
- Employment Departure Exemption: Indian citizens leaving India for overseas employment—or working as ship crew—are only counted as residents if their Indian presence totals 182 days or more for the year.
- Deemed Residency for ‘Stateless’ Individuals: Indian citizens earning more than ₹1.5 million from Indian sources and not liable to tax in another country are deemed residents, regardless of time spent in India.
Resident but Not Ordinarily Resident (RNOR) Status
Even after qualifying for residency, an individual might be classified as “Resident but Not Ordinarily Resident” (RNOR). The main criteria are:
- You were a non-resident in 9 out of the previous 10 tax years; or
- Your stay in India totaled 729 days or less during the 7 preceding tax years.
This status provides limited Indian tax liability—generally only on Indian-sourced income or income received in India.
Table: Summary of Core Indian Tax Residency Rules (2025)
| Rule | Applies to? | Days Required | Notes |
|---|---|---|---|
| 182-Day Main Rule | All individuals | 182 days | Standard residency trigger |
| 60/365 Day Rule | All individuals | 60 + 365 | Combines current and prior presence |
| 120-Day Rule (Since 1 April 2020) |
Indian citizens/PIOs with Indian-source income > ₹1.5 million | 120 + 365 | For certain high-earning arrivals/returnees |
| Deemed Residency | Indian citizens earning > ₹1.5 million & not liable to tax elsewhere |
0 | Regardless of physical presence |
| RNOR Classification | Recent arrivals or returnees | Varies (see above) | Limited tax liability on overseas income |
Pro Tips for Managing Indian Tax Residency (2025)
- Track all days spent in India meticulously across each tax year, as even small unplanned visits can trigger residency under the 60-day or 120-day rules.
- Review your sources of income—if Indian-sourced income exceeds ₹1.5 million ($18,000) and you are not taxed elsewhere, you may be deemed resident regardless of how many days you spend in India.
- If planning overseas employment, time your departures and arrivals carefully to optimize residency status, especially for Indian citizens subject to the 182-day rule.
- Understand the RNOR rules to potentially reduce liability on global income for the first few years of Indian residency or repatriation.
Further Resources
For the latest official guidance, consult the Income Tax Department of India.
Understanding India’s residency rules is critical for international business owners, expats, and those with Indian ties. The classification depends on a mix of physical presence and specific income circumstances, so monitoring both is essential for compliant tax planning. Given the nuances for returning citizens, workers abroad, and those with significant Indian income but no foreign liability, keeping precise records is the best path to avoid unintentional residency status and unnecessary tax exposure.