Income Tax Act, 2025: NRI tax residency in India—182-day stay rule, ₹15 lakh threshold and ITR exemption condition

Living abroad does not automatically make you a non-resident for Indian tax purposes. Residency depends on the number of days spent in India, income and other conditions. Know about the 182-day and 120-day tests, deemed residency, ITR exemptions and the transition to the Income Tax Act, 2025. 

Living overseas does not automatically make an Indian citizen a non-resident for income-tax purposes. The determination depends on the number of days spent in India, the nature of income earned, and the individual’s residential history.

Under Section 115G of the Income-tax Act, 1961, non-resident Indians (NRIs) are exempt from filing an income-tax return (ITR) if their total income consists only of investment income, long-term capital gains, or both (subject to TDS).

With the Income-tax Act, 2025 coming into force on 1 April 2026, tax residency, tax liability and ITR filing requirements remain unchanged. But understanding the applicable residency rules and return-filing requirements remains important for Indians living abroad.

How is Indian tax residency determined?

Under Section 6 of the Income-tax Act, 2025, an individual is treated as a resident if they stay in India for at least 182 days during the relevant tax year.

Alternatively, they may qualify as a resident if they spend at least 60 days in India during that year and at least 365 days in the preceding four years. These conditions are identical to those in Section 6(1) of the old Income-tax Act, 1961.

Indian citizens leaving the country for employment abroad, or as crew members of Indian ships, are eligible for a relaxation. For them, the 60-day test combined with the 365-day requirement does not apply. They qualify as residents only if their stay in India reaches 182 days during the relevant tax year.