Section 6 of the Income Tax Act: Residence in India
Section 6 determines whether a person is resident or non-resident in India for income-tax purposes. The rules cover individual stay in India, special treatment for NRIs and Indian citizens, deemed residency, not ordinarily resident status, and residence of companies and other entities.
For tax years starting on or after 1 April 2026, Section 6 of the Income-tax Act, 2025 applies. Section 6 of the Income-tax Act, 1961 remains relevant to tax years beginning before that date, including assessments and reassessments for those years.
1. Individual residential status: main tests
Under Section 6(2) of the 2025 Act, an individual is ordinarily treated as a resident if either of these tests is satisfied during the relevant tax year:
- 182-day test: Physical presence in India for at least 182 days in the tax year.
- 60 days plus 365 days test: Presence for at least 60 days in that tax year and at least 365 days in total during the four preceding tax years.
These are alternative tests, not cumulative requirements. The law modifies the second test for specified Indian citizens and persons of Indian origin. Days must be counted for the correct tax year and the appropriate look-back period.
2. Special rules for Indian citizens and NRIs
Indian citizen leaving India for overseas employment or as ship crew
An Indian citizen leaving India for employment outside India or as a crew member of an Indian ship generally becomes resident under the physical-presence test only upon reaching 182 days in India in the relevant tax year. Prescribed rules apply when calculating the stay of crew members of foreign-bound ships.
Indian citizen or person of Indian origin visiting India
For an Indian citizen or person of Indian origin who lives outside India and visits India, the ordinary 60-day threshold is generally replaced with 182 days. However, where Indian-source income other than foreign-source income exceeds Rs. 15 lakh, the relevant visiting-person threshold can be 120 days, read with the 365-day look-back condition. The statutory definitions and exceptions should be checked before relying on these tests.
Deemed residency
Under Section 6(7) of the 2025 Act, an Indian citizen with total income (other than income from foreign sources) exceeding Rs. 15 lakh may be deemed resident if not liable to tax in any other country or territory by reason of domicile, residence or similar criteria, subject to the precise statutory conditions. This rule does not automatically apply to every NRI.
3. Resident but not ordinarily resident (RNOR)
Residential status involves a further distinction between resident and ordinarily resident (ROR) and resident but not ordinarily resident (RNOR). Under Section 6(13) of the 2025 Act, an individual generally qualifies as not ordinarily resident if non-resident in nine of the ten preceding years, or present in India for 729 days or less in the seven preceding years. Additional RNOR categories cover certain individuals meeting the 120-day visiting-person rule and deemed residents.
For a Hindu undivided family, the historical residency and stay tests are applied with reference to its manager as provided by law. The scope of taxable foreign income differs between ROR and RNOR taxpayers; see Section 5: Scope of total income.
4. HUFs, firms, companies and other persons
| Taxpayer category | Residence test in general terms |
|---|---|
| HUF, firm or association of persons | Generally resident unless control and management of affairs is wholly outside India. |
| Company | Resident if it is an Indian company or its place of effective management (POEM) is in India during the tax year. |
| Other persons | Generally resident unless control and management is wholly outside India, subject to the applicable statutory provisions. |
Place of effective management (POEM) means the place where the key management and commercial decisions necessary for conducting the business of the entity as a whole are, in substance, made. A company incorporated abroad can therefore be Indian tax resident where the POEM test is met.
5. Practical examples
- Example A: A person stays in India for 190 days during tax year 2026-27. The 182-day test is met and the person is resident, subject to the complete statutory framework.
- Example B: A person stays 90 days during tax year 2026-27 and 400 days across the previous four years. The general 60-plus-365 test is met, but special NRI rules may change the result.
- Example C: An Indian citizen living abroad visits India for 130 days, has the required four-year history, and exceeds the relevant Rs. 15 lakh Indian-income threshold. The special 120-day rule and RNOR classification require consideration.
These examples are simplified and do not replace a review of passport travel dates, income categories, applicable treaties and the complete law.
6. Income-tax Act, 1961 versus Income-tax Act, 2025
The principal 182-day and 60-plus-365-day residency tests continue in the new legislation. For tax year 2025-26 (assessment year 2026-27), residence is determined under the 1961 Act even if proceedings occur after April 2026. For tax year 2026-27 and later, the 2025 Act applies. Earlier years are still considered when calculating statutory look-back periods.
The older webpage below contains a historical transcription of Section 6 of the 1961 Act. It predates certain amendments, including later provisions affecting Indian citizens and visiting NRIs, and must not be treated as a complete statement of the final amended 1961 law.
7. Original Section 6 text and legislative notes (historical archive)
For the purposes of this Act,-
(1) An individual is said to be resident in India in any previous year, if he-
(a) is in India in that year for a period
or periods amounting in all to one hundred and eighty two days or more; or
1 * * * * *
(c) having within the four years preceding that year been in India for a period
or periods amounting in all to three hundred and sixty-five days or more, is in
India for a period or periods amounting in all to sixty days or more in that
year.
2 Explanation 3 1.-In the case of an individual,-
(a) being a citizen of India, who leaves India in any previous year 4 as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted;
(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and 5 eighty-two days" had been substituted.
6 Explanation 2.-For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.
7 (3) A company is said to be a resident in India in any previous year, if-
(i) it is an Indian company; or
(ii) its place of effective management, in that year, is in India.
Explanation.-For the purposes of this clause "place of effective management" means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made.
(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.
(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.
8 (6) A person is said to be "not ordinarily resident" in India in any previous year if such person is-
(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
(b) a Hindu undivided family whose manager has been a non-resident in India in
nine out of the ten previous years preceding that year, or has during the seven
previous years preceding that year been in India for a period of, or periods
amounting in all to, seven hundred and twenty-nine days or less.
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1. Sub-clause (b) omitted by Act 14 of 1982, s. 3 (w.e.f. 1-4-1983).
2. Subs. by Act 36 of 1989, s. 3, for the "Explanation" (w.e.f. 1-4-1990).
3. Explanation renumbered as Explanation1 thereof by Act 20 of 2015, s. 4 (w.e.f. 1-4-2015).
4. Ins. by Act 12 of 1990, s. 4 (w.e.f. 1-4-1990).
5. Subs. by Act 32 of 1994, s. 5 (w.e.f. 1-4-1995).
6. Ins. by Act 20 of 2015, s. 4 (w.e.f. 1-4-2015).
7. Subs. by Act 28 of 2016, s. 4, for clause (3) (w.e.f. 1-4-2017).
8. Subs. by Act 32 of 2003, s. 4, for certain
words (w.e.f. 1-4-2004).
8. Frequently asked questions
What is the basic 182-day rule?
An individual who stays in India for 182 days or more in a tax year is generally resident in India for that year.
Can a person become resident with only 60 days in India?
Yes. Generally, a stay of at least 60 days in the tax year combined with 365 days in the preceding four years can establish residence. Special rules apply to certain Indian citizens and persons of Indian origin.
Does a person have to pay Indian tax on all foreign income?
Not necessarily. The scope of taxable income depends on whether the individual is resident and ordinarily resident, resident but not ordinarily resident, or non-resident, as well as exemptions and treaty provisions.
Which law applies to tax year 2026-27?
Section 6 of the Income-tax Act, 2025 applies to tax years beginning on or after 1 April 2026. Section 6 of the 1961 Act continues to apply to earlier years.
9. Official legislation and guidance
This page is general information, not individual tax advice. Treaty residence and relief may require a separate analysis.