TaxFinancial Glossary
Residential Status (Tax)
Definition
Your tax classification under Indian law — Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RNOR), or Non-Resident (NR). It depends on the number of days you spend in India during the financial year. ROR status means your worldwide income is taxable in India; NR status means only Indian-source income is taxable.
Why It Matters
Residential status determines which income is taxable in India. An NRI earning salary in Dubai pays zero Indian tax on that salary, but pays tax on Indian rental income. Getting the status wrong can result in either over-taxation or non-compliance. The 182-day rule is the primary threshold, but there are additional criteria for RNOR status.