How is my residential status and RNOR classification decided for income tax

Question

I moved back to India after many years abroad and I want to know how my residential status affects which income gets taxed here. Before I spend money on it, I want to know whether Income-tax Act, 1961, Section 6 gives me a remedy here and what proof I would need. Any Section numbers I can quote when I write to them would be useful.

MyVakeel Legal Desk · Accepted Answer

Income-tax Act, 1961, Section 6, Income-tax Act, 1961, Section 5 and Income-tax Act, 2025 is what decides this question in India. Read it alongside the provisions named, because the relief available to you turns on the facts you can prove on paper.

Section 6 of the Income-tax Act, 1961 classifies individuals as resident and ordinarily resident, resident but not ordinarily resident (RNOR), or non-resident, based on the number of days present in India during the relevant year and the preceding ten years.

An RNOR is a returning Indian who satisfies the basic residency test but fails the additional conditions on prior years of residence or stay in India, and this status is typically available for one or two years after returning permanently.

Section 5 provides that a resident and ordinarily resident is taxed on global income, while a non-resident or RNOR is taxed only on income received, accruing or arising in India, so foreign salary, foreign bank interest and foreign business income earned before or shortly after return may escape Indian tax during RNOR years.

Special deeming provisions apply to Indian citizens with total Indian income above a threshold who are not liable to tax anywhere else, deeming them resident even without meeting the normal day-count test, so high-income individuals cannot avoid residency purely by minimising days in India.

Because RNOR status is time-bound and depends on precise day counts, returning residents should maintain travel records and passport stamps to substantiate their claimed status if the assessing officer questions it.

In practice, in this order: 1) Calculate exact days spent in India for the current year and preceding ten years; 2) Determine whether basic and additional conditions under Section 6 are satisfied; 3) Claim RNOR status in the return and disclose only India-sourced or India-received income accordingly; 4) Keep travel and visa records to prove residential status if queried.

Timing matters here: Income-tax Act, 1961, Section 6 works on limitation periods, so a residential status claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in tax law.