There’s a very thin line between being a Resident or a Non-Resident and surprisingly, that line is not the same across all laws. Confused whether you are a Resident or an NRI?
Check your residency status under both the Income Tax Act & FEMA in under 30 seconds here: https://tally.so/r/J91j47
Most people assume residency is a simple label. It isn’t. You could be a Resident under the Income Tax Act and Non-Resident under FEMA at the same time. And that’s where most mistakes (and tax issues) begin.
📌 Residency under the Income Tax Act (Purely based on physical presence. Passport or citizenship does NOT matter.)
Step 1: Resident or Non-Resident?
You are treated as a Resident in a financial year if any one of the following is satisfied:
1️⃣ You were in India for 182 days or more during the relevant year, OR
2️⃣ You were in India for 365 days or more in the last 4 years and 60 days or more in the relevant year.
⚠️ Important exception (often missed):
For Indian citizens / PIOs visiting India whose Indian income (excluding foreign income) exceeds ₹15 lakh, the 60-day condition becomes 120 days.
If neither condition is met, you are a Non-Resident (NR) for tax purposes.
Step 2: If Resident, are you ROR or RNOR?
Once classified as Resident, the law checks two additional conditions:
1️⃣Resident in at least 2 out of the last 10 years, AND
2️⃣Stayed in India for 730 days or more during the last 7 years.
- If both are met → Resident & Ordinarily Resident (ROR)
- If either fails → Resident but Not Ordinarily Resident (RNOR)
🧩 You become RNOR by default if:
- You are an Indian citizen / PIO with Indian income > ₹15 lakh and stayed 120–181 days, or
- You are a Deemed Resident (Indian citizen, income > ₹15 lakh, not liable to tax in any other country)
📌 Residency under FEMA (Purely based on intentions.)
FEMA doesn’t care only about days. It cares about purpose and intention.
Under FEMA, a person is considered Resident in India if they stayed in India for more than 182 days in the preceding financial year.
❗ But even after 182 days, you are treated as Non-Resident under FEMA if:
- You went abroad for employment, business, education or vocation, or
- You went abroad with an intention to stay outside India for an uncertain period
This is why: You can be Resident under Income Tax but Non-Resident under FEMA, or vice versa.
Consequences of getting this wrong can mean:
- Excess tax
- Invalid investments
- FEMA violations
Want clarity in under 30 seconds? Check your residency under both laws here: https://tally.so/r/J91j47