A software engineer from Germany moves to Bengaluru in May on an employment visa. She reads that you become an Indian tax resident at 182 days, counts four months to the end of the tax year, and concludes she is safely non-resident.
She is resident, and she was resident from well before she did the arithmetic.
The 182 days she read about is not the general rule. It is a relief, and the relief was written for someone else.
The ordinary test of residence has two limbs. Under Section 6(1) of the Income-tax Act 1961 — Section 6(1) of the Income-tax Act 2025 from tax year 2026-27 — you are resident in India in a tax year if either:
- you were in India for 182 days or more in that year; or
- you were in India for 60 days or more in that year and 365 days or more in the four preceding years.
Both limbs are live. The second one is the one that catches people, because 60 days is a little over eight weeks.
What the commentary usually quotes is Explanation 1(b) to Section 6(1) of the 1961 Act — Sections 6(4) and 6(5) of the 2025 Act — which replaces that 60-day figure with 182 days. But read who it is for:
a citizen of India or a person of Indian origin … who, being outside India, comes on a visit to India
Two conditions, and both have to hold. You must be an Indian citizen or a person of Indian origin, and you must be coming on a visit.
A German passport holder with no Indian ancestry satisfies neither. The relief is simply not available, and the 60-day limb applies to her in full.
This is worth saying plainly because it is the single most common assumption.
Residence under the Income-tax Act is a day count. An employment visa, a business visa, an e-visa, a long-term entry permit, an OCI card — none of them is a tax status. None of them appears in Section 6. A person on a five-year employment visa who spends 50 days a year in India is not resident; a person on a tourist visa who spends 200 days is.
The corollary matters as much: your employer's view of your status is not determinative either, and payroll set up on an assumption about residence is one of the more expensive things to unwind after the year has closed.
If you might fall inside the relief, the test is specific. Under Section 2(78) of the 2025 Act — carried over from the Explanation to Section 115C(e) of the 1961 Act — you are of Indian origin if you, either of your parents, or any of your grandparents were born in undivided India.
So the question needs seven answers: your place and date of birth, both parents', and all four grandparents'. Not nationality, not surname, not where the family considers itself from. Appearance and the colour of a passport decide nothing at all.
Two points to raise rather than assume:
- "Undivided India" means pre-partition British India, so a grandparent born in what is now Pakistan or Bangladesh can bring you inside the definition.
- Whether a birth in India after 1947 counts is genuinely arguable on the wording. Where a case turns on it, it should be argued both ways, not assumed in the taxpayer's favour.
And even for a person who is of Indian origin, the second condition remains: the relief needs a visit. Someone living in India for most of the year is not obviously visiting, and that reading is open to the department.
Being resident is not the end of it, and this is where most of the relief for a newly arrived foreign national actually sits.
Section 6(6)(a) of the 1961 Act — Section 6(13)(a) of the 2025 Act — makes you not ordinarily resident (RNOR) if either:
- you were non-resident in nine of the ten preceding years; or
- you were in India for 729 days or fewer in the seven preceding years.
Someone who has just moved to India will almost always satisfy at least one. The consequence is substantial: an RNOR is taxed on Indian income but not on foreign income. Your salary from abroad, your investments at home, your rental property in Munich — outside Indian tax while the window lasts.
It is a window, not a status. It closes, and there is no split year in India: each tax year is tested on its own facts, from scratch.
Here is the part that is routinely got wrong, and it was the question behind one of the enquiries that prompted this note.
The RNOR shelter for foreign income does not extend to income from a business controlled in India, or a profession set up in India. That carve-out is in the proviso to Section 5(1) of the 1961 Act and Section 5(1)(c) of the 2025 Act.
Consider a consultant who moves to Goa, keeps every client in Europe, invoices in euros and is paid into a European bank account. Nothing about the money is Indian. But the work is being done from India, so the profession is set up in India — and the fees are Indian-taxable even as an RNOR.
The test is where the professional activity is carried on, not where the client is, where the invoice is raised, or where the money lands. A remote worker who assumes RNOR covers freelance earnings because the clients are abroad has the rule backwards.
Where the income is taxable in both countries, the treaty with your country of residence is the next question — and under an Article 14 or 15 type test a day-count window that ends in the Indian tax year can reach back into the previous one, so a light year is not automatically a protected year.
You will need a PAN. The application for a person who is not an Indian citizen was Form 49AA under the 1962 Rules; under the Income-tax Rules 2026 the application for a non-citizen is Form 95.
One caution, offered rather than buried: the entire form set was renumbered with the 2026 Rules and the change is recent. Confirm the current form on the e-filing portal when you apply, rather than relying on a number quoted in any article, this one included.
- Get the passport stamps, for this year and the four before it. Everything else is downstream of the day count, and a count built from memory is not a count.
- Count both limbs — 182 days, and 60 days plus 365 across four years. Present the arrival and departure days both ways if you are near a threshold.
- Establish Indian origin on birthplaces, only if the relief might be in play.
- Test RNOR under Section 6(6)(a) / 6(13)(a).
- Separate the income into Indian-source, foreign-source, and the business-or-profession carve-out. That third category is the one that moves the number.
- Then look at the treaty, and only then at the return.
Steps 1 and 2 are arithmetic and cannot be argued with once the stamps are on the table. Everything contentious lives in steps 3 and 5.
If you are here because your employer set you up in India, or because an Indian company you own employs you, the entity side runs alongside this: the first 90 days of a foreign-owned company in India and the resident director requirement cover what the company has to do while you are working out what you have to do.