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Section 6 of Income-tax Act, 2025: Who Is Resident in India?

Section 6, titled Residence in India, determines whether a person is resident or non-resident for a tax year. For individuals, it also determines when a resident is not ordinarily resident. Residential status affects the scope of income chargeable in India under Section 5.

Current law: The Income-tax Act, 2025 applies from 1 April 2026, subject to the repeal and savings provisions. This article explains Section 6 for tax years governed by the 2025 Act, taking account of the official text published as amended by the Finance Act, 2026. Earlier years may continue to be governed by the Income-tax Act, 1961.

1. When is an individual resident in India? Section 6(1) and (2)

Residential status is determined separately for each tax year. Under Section 6(2), an individual is generally resident in India if either of the following tests is satisfied:

  • 182-day test: presence in India for 182 days or more during the relevant tax year; or
  • 60-day plus 365-day test: presence in India for 60 days or more during the relevant tax year and for 365 days or more in aggregate during the four preceding tax years.

These are alternative tests, not cumulative tests. However, special provisions modify the second test for specified Indian citizens and persons of Indian origin.

2. Special rules for Indian citizens and persons of Indian origin: Section 6(3) to (6)

Indian citizens leaving India for employment or as qualifying ship crew

For an Indian citizen leaving India in a tax year for employment outside India or as a qualifying crew member of an Indian ship, the 60-day test is generally displaced. Consequently, the 182-day threshold ordinarily becomes the relevant test. The precise statutory conditions and the applicable rules for calculating crew stay must be checked.

Indian citizens and persons of Indian origin visiting India

For an Indian citizen or person of Indian origin who is outside India and visits India, the 60-day threshold is generally replaced by 182 days. A special 120-day threshold applies where the person's total income, excluding income from foreign sources, exceeds Rs. 15 lakh during the tax year. The requirement of 365 days in the preceding four years continues to be relevant for this modified test.

Important: The 120-day rule does not automatically make every visitor resident. The applicable preceding-four-year stay requirement must also be satisfied. A qualifying individual resident under the 120-day rule but present for fewer than 182 days is treated as not ordinarily resident under Section 6(13).

3. Deemed residence of certain Indian citizens: Section 6(7) and (8)

An Indian citizen may be deemed resident in India if the statutory conditions are satisfied: the citizen is not liable to tax in any other country or territory by reason of domicile, residence or a similar criterion, and total income excluding income from foreign sources exceeds Rs. 15 lakh for the tax year. The deeming rule does not apply if the individual is already resident under the ordinary residence provisions of Section 6(2) to (6).

A deemed resident under Section 6(7) is treated as not ordinarily resident under Section 6(13). Being free from tax on a particular item of income is not by itself the same as satisfying the statutory test of not being liable to tax by reason of residence or a similar criterion.

4. Residence of HUFs, firms, companies and other persons

Section 6(9): HUF, firm or association of persons. Such an entity is resident in India unless the control and management of its affairs is situated wholly outside India during the tax year.
Section 6(10): Company. A company is resident in India if it is an Indian company or its place of effective management (POEM) is in India during the tax year. POEM is the place where key management and commercial decisions necessary for the conduct of the company's business as a whole are, in substance, made.
Section 6(11): Other persons. A person not covered by the preceding specific categories is resident unless control and management of that person's affairs is situated wholly outside India during the tax year.
Section 6(12): Consistency across sources. If a person is resident for one source of income, the person is deemed resident for the other sources of income for that tax year.

5. Who is not ordinarily resident? Section 6(13)

A person who is resident in India may nevertheless qualify as not ordinarily resident (RNOR) in specified circumstances. These include:

  • An individual who was non-resident in India in nine out of the ten preceding tax years, or was in India for 729 days or less during the seven preceding tax years.
  • A Hindu undivided family whose manager satisfies the corresponding historical non-residence or 729-day test.
  • A qualifying Indian citizen or person of Indian origin with Indian-source and other non-foreign-source income exceeding Rs. 15 lakh, resident under the special 120-day visit rule, with presence of at least 120 but fewer than 182 days.
  • An Indian citizen deemed resident under Section 6(7).

A resident who does not meet the applicable RNOR criteria is generally referred to as resident and ordinarily resident (ROR). These are common explanatory abbreviations, not substitutes for the statutory wording.

6. Why does residential status matter? Section 5

Under Section 5, a resident and ordinarily resident person is generally subject to Indian taxation on income from Indian and foreign sources, subject to the Act and applicable treaty relief. A non-resident is generally taxed on income received or deemed received in India or accruing, arising or deemed to accrue or arise in India. For an RNOR, foreign income is generally outside the scope of Indian total income unless derived from a business controlled in India or a profession set up in India, subject to the detailed statutory rules.

Illustrative examples

  • Example A: An individual present in India for 190 days in the tax year generally meets the 182-day residence test. Ordinary residence must then be examined separately.
  • Example B: An individual present for 75 days in the current year and 400 days in the preceding four years may meet the general 60-day plus 365-day test, unless a special exception applies.
  • Example C: A qualifying Indian citizen visiting India for 135 days with relevant income above Rs. 15 lakh may become resident if the preceding-four-year 365-day condition is met; the special RNOR provision may then apply.
Practical point: Maintain passport and travel records, determine each day of presence accurately, identify the nature of income and check applicable double taxation avoidance agreements. Residence under domestic law and treaty residence are related but distinct questions.

7. Frequently asked questions

Is an NRI always a non-resident for income-tax purposes?

No. Residential status must be tested for each tax year under Section 6. The expression NRI used in other legal or banking contexts does not by itself determine income-tax residence.

Does staying in India for 120 days automatically make a person resident?

No. The special rule is limited to qualifying Indian citizens or persons of Indian origin, includes an income threshold exceeding Rs. 15 lakh excluding foreign-source income, and requires the prescribed stay in the preceding four years.

Can a person be resident but not ordinarily resident?

Yes. Section 6(13) sets out the qualifying circumstances, including historical residence tests and certain special categories.

Does an Indian company have to apply the POEM test?

An Indian company is resident by virtue of its status as an Indian company. POEM is an additional basis on which a company may be resident in India.

Is residential status the same as citizenship?

No. Citizenship is relevant to certain exceptions and the deemed residence rule, but the statutory residence tests depend on several factors, including days of presence and, where applicable, income and management.

8. Official text and further reading

Income-tax Act 2025 (official amended PDF)Official Section 6Official Act and Rules resources

Last reviewed: 10 November 2026. This article is a general legal explanation; the statutory text, applicable rules, notifications and treaty provisions govern individual cases.