Section 6 Day-Count Rules: How Many Days in India Turn an NRI Into a Tax Resident

For a non-resident Indian, one arithmetic question sits underneath every other tax decision: how many days were you physically present in India this year? Section 6 of the Income-tax Act 1961 turns that day-count into a legal status, and the status decides whether your Dubai salary, your US brokerage gains, or your Singapore rental stays outside the Indian net or gets pulled into it. Cross a threshold by a single day and a return visit meant to see family can convert a lifetime of foreign income into taxable Indian income. This piece walks through the exact day-count rules for financial year 2025-26 (assessment year 2026-27), the three-tier status that follows, and how the answer interacts with treaty relief and repatriation.

Residential status is a year-by-year test, not a permanent label: you can be a non-resident in 2024-25, a resident in 2025-26, and a non-resident again in 2026-27 purely on how many days you spent in India each year. Because the test resets every 1 April, an NRI planning a long India visit should count days before booking the return flight. Pressure-test your own numbers against our NRI tax calculator before the year closes.

FEMA / DTAA Position

Two separate laws use the word "resident", and they do not mean the same thing. Under the Foreign Exchange Management Act 1999 (FEMA), residency turns primarily on the purpose and intention of your stay, not a mechanical day-count: Section 2(v) of FEMA 1999 treats a person who leaves India for employment, business, or an uncertain-duration stay abroad as a person resident outside India from the day of departure, even if they were physically in India for more than 182 days in the preceding financial year. The Income-tax Act, by contrast, is purely arithmetic, counting days under Section 6. It is entirely possible to be a non-resident under FEMA (so you may hold an NRE account) yet a resident under the Income-tax Act in the same year, because the two statutes ask different questions.

The distinction matters the moment you become an Income-tax resident while still holding a foreign tax residence. That is where the Double Taxation Avoidance Agreement (DTAA) steps in. When two countries both claim you as a resident, the tie-breaker cascade in Article 4 of the relevant treaty decides which wins for treaty purposes: permanent home first, then centre of vital interests, then habitual abode, then nationality, and finally mutual agreement between the competent authorities. Winning the tie-breaker as, say, a UAE resident does not switch off Indian domestic residency, but it caps India's taxing rights on treaty-covered income to the DTAA rates. Crucially, India retains the right to tax capital gains on shares of an Indian company at 12.5% under every major treaty; the DTAA does not make those gains "exempt".

The US treaty charges the lower 15% dividend rate only where the recipient holds at least 10% of the voting stock (a parent-subsidiary holding under Article 10); ordinary portfolio investors face 25%. To claim any of these capped rates you must produce a Tax Residency Certificate from your country of residence, a point we cover in our explainer on Section 90 and DTAA treaty relief.

Tax Treatment in India

Section 6(1) sets two basic tests, and satisfying either one makes you a resident for that year. The first is the 182-day test: physical presence in India for 182 days or more during the financial year. The second is the 60-day test: presence for 60 days or more in the year, combined with 365 days or more across the four immediately preceding financial years. Miss both and you are a non-resident for the year.

For an Indian citizen or a person of Indian origin (PIO) who lives abroad and only visits India, the 60-day limb is relaxed. Historically it was pushed out to 182 days, so a visiting NRI effectively had a single 182-day threshold. Since the Finance Act 2020, a middle tier exists: where such a visitor's total income accruing or arising in India (other than income from foreign sources) exceeds Rs 15 lakh in the year, the relaxed threshold drops from 182 days to 120 days. The rules read together as follows.

Becoming a resident does not automatically mean your worldwide income is taxed. Section 6(6) sub-classifies every resident as either Ordinarily Resident (ROR) or Not Ordinarily Resident (RNOR). You are RNOR if you were a non-resident in India in 9 of the 10 preceding financial years, or if you were in India for 729 days or fewer during the 7 preceding financial years. The 120-day category individuals are also treated as RNOR by statute. The classification is the whole game for a returning NRI, because it decides how much foreign income India can reach.

There is also a deemed-residency trap. Section 6(1A), inserted by the Finance Act 2020, deems an Indian citizen a resident (specifically an RNOR) where their total income other than from foreign sources exceeds Rs 15 lakh and they are not liable to tax in any other country by reason of domicile or residence. This "stateless income" rule targets Indians tax-resident nowhere; a genuine UAE or US tax resident with a Tax Residency Certificate falls outside it. Once your status is fixed, tax is computed on the ordinary slabs. For FY 2025-26 the new regime is tax-free up to Rs 4 lakh, with the Section 87A rebate now Rs 60,000 covering income up to Rs 12 lakh; note, though, that the 87A rebate is not available to non-residents. The surcharge on high incomes is capped at 25% in the new regime rather than the old 37%, and a 4% health and education cess applies on top. Model the final liability with the NRI tax calculator and, for house-property income, the rental income tax calculator.

A returning NRI should also watch TDS. Where a payer treats you as a non-resident, tax is deducted under Section 195 at rates often higher than your eventual slab liability, and the money is locked until you file a return. That mismatch between what is deducted and what is owed is exactly why a lower-deduction certificate exists, as covered in our guide to cutting excess TDS with Form 13.

Tax Treatment Abroad

The day you become an Indian resident, you may be taxed on the same income by both India and your country of residence, and relief then runs through the foreign-tax-credit (FTC) machinery. India follows the credit method under Section 90 for treaty countries: the country of source taxes first at the capped treaty rate, and the country of residence gives credit for that tax against its own liability on the same income. Article 24 of the India-US treaty and its equivalents in the UK and UAE agreements make this credit reciprocal, so double tax is relieved rather than duplicated.

The direction of the credit depends on which country the tie-breaker treats as your residence. Suppose you spend 190 days in India in 2025-26 and become an Indian resident, but the tie-breaker still lands you as a US resident because your permanent home and family remain in the US. India, as source country for your Indian salary and share gains, taxes those at treaty-capped rates; the US, as residence country, taxes worldwide income but credits the Indian tax paid. Conversely, once you are ROR, India taxes your US income too and grants you an FTC for the US tax, claimed by filing Form 67 before the return due date, as set out in our explainer on double taxation relief and Form 67.

Foreign tax credit is never automatic and never unlimited. The credit is capped at the lower of the foreign tax actually paid and the Indian tax attributable to that doubly-taxed income, so a high foreign rate does not generate a refundable surplus in India. Gulf residents face a sharper version of this: because the UAE levied no personal income tax on salaries through 2025-26, there is no foreign tax to credit, and any income India is entitled to tax is taxed in full at Indian rates with no offset.

Repatriation Mechanics

Residential status and account type are linked but not identical, and confusing them is a common and expensive error. FEMA residency governs which bank account you may operate: as long as you remain a person resident outside India under FEMA, you may hold NRE, NRO and FCNR accounts, regardless of how your Income-tax day-count falls in any single year. Interest on an NRE savings or fixed deposit and on an FCNR deposit is exempt from Indian income tax under Section 10(4) only while you qualify as a person resident outside India under FEMA; NRO interest is fully taxable and suffers TDS at 30% plus surcharge and cess.

Repatriation from the two accounts follows different rules. NRE and FCNR balances, being sourced from foreign earnings, are freely and fully repatriable, principal and interest, without any monetary ceiling. NRO balances, which hold India-sourced income such as rent, dividends and pension, are repatriable only up to USD 1 million per financial year, and only after the tax on that income has been paid and certified. The table below summarises the three account types an NRI typically runs in parallel.

To remit from an NRO account, the bank requires two forms before releasing funds abroad: Form 15CA and Form 15CB. Form 15CB is a chartered accountant's certificate confirming the applicable tax has been deducted and the remittance is DTAA-compliant, and Form 15CA is the remitter's own declaration filed on the income-tax portal. The Reserve Bank of India permits the USD 1 million window under its Foreign Exchange Management (Remittance of Assets) Regulations, and it runs per financial year, so unused headroom does not carry forward. Plan large remittances with the repatriation calculator so a property sale or investment redemption is spread across years where the proceeds exceed the annual cap.

One practical sequence matters when you transition status. The day-count that made you an Income-tax resident does not, by itself, strip your FEMA non-resident status, but a permanent return to India with the intention of staying does; from that point NRE and FCNR accounts must be redesignated as resident accounts under FEMA rules, and the Section 10(4) interest exemption ceases.

FAQ

Does a single extra day in India change my tax status?

Yes. Section 6 thresholds are hard cut-offs, so 182 days makes you a resident while 181 days does not, and 120 days can make a high-income visiting NRI a resident while 119 days does not. Because the count includes both the day of arrival and the day of departure under the accepted reading of the section, NRIs cutting it fine should keep passport stamps and boarding passes for every entry and exit in the year.

I became an Indian resident this year. Is my foreign salary now taxable in India?

Not necessarily. If you qualify as Not Ordinarily Resident (RNOR), your foreign-sourced salary generally stays outside the Indian net; foreign income becomes taxable in India only once you are Ordinarily Resident, which typically takes two to three years after a permanent return. Check your ROR/RNOR classification against the Section 6(6) tests, since it, not the bare fact of residency, decides the point.

Can I still keep my NRE account if I spent 190 days in India?

Usually yes, because NRE eligibility is a FEMA question of intention, not an Income-tax day-count. A long visit that makes you an Income-tax resident for the year does not by itself end your FEMA non-resident status; a permanent return with intent to settle does. Redesignate the account only when your FEMA status actually changes.

Are my capital gains on Indian shares exempt under the DTAA if I live in the UAE?

No. India retains the right to tax capital gains on shares of an Indian company, and the applicable long-term rate is 12.5% across the USA, UK and UAE treaties. Treaty relief reduces rates on dividends and interest and prevents double taxation through credit, but it does not make Indian-share capital gains exempt in India.

How does the Rs 15 lakh income figure work?

For a visiting Indian citizen or PIO, if total income accruing or arising in India (other than foreign-source income) exceeds Rs 15 lakh in the year, the residency threshold tightens from 182 days to 120 days, and a separate deemed-residency rule under Section 6(1A) can apply to an Indian citizen taxed nowhere else. Below Rs 15 lakh of Indian income, the single 182-day test continues to apply to visiting NRIs.

What is the maximum I can repatriate from my NRO account each year?

USD 1 million per financial year, after the applicable tax is paid and a chartered accountant certifies compliance on Form 15CB, with Form 15CA filed on the portal. The limit runs per financial year and unused room does not carry forward, so time large remittances accordingly.

Which years feed the four-year and seven-year look-backs?

The four preceding financial years feed the 365-day limb of the 60-day and 120-day tests, and the seven preceding years feed the 729-day RNOR test; each financial year runs 1 April to 31 March. Count only the days physically present in India in each of those years, using the same arrival-and-departure-inclusive method as the current-year count.

_This article is general information on the law as it stands for FY 2025-26 and not individual tax advice. Verify your own day-count and status with a qualified adviser before acting._