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Published on: Jul 27, 2026

Residential Status for Income Tax

Residential status refers to a person's status with reference to the question of how long the person has stayed in India for the past five years. The income tax liability of a taxpayer is based on the residential status in the financial year, and four years preceding the financial year. Also, while

filing income tax returns

, the taxpayer must declare the applicable residential status in the tax return. Under the Income Tax Act, taxpayers are divided into three categories of residential status, namely:

  • Resident but not ordinarily resident.
  • Ordinarily resident.
  • Non-resident.

Resident but Not Ordinarily Resident

An individual is a resident but not ordinarily resident in India in any financial year if the assessee fulfils any one of the following two conditions:

  1. The taxpayer is in India in a particular financial year for 182 days or more, or
  2. The taxpayer has been in India for at least 365 days in the four years immediately preceding a particular financial year and is in India for 182 days or more in that year.

Ordinary Resident

A person is said to be “not ordinarily resident” in India in any financial year if the person is-

  1. An individual who has been a non-resident in India in nine out of the ten previous years preceding a particular financial year, or has during the seven financial 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
  2. Hindu Undivided Family (HUF) whose manager has been a non-resident in India in nine out of the ten financial years preceding the relevant financial year or has during the seven financial years preceding that year in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less. Thus, an “ordinary resident” would be a resident who is outside the purview of the above definition.

Non-Resident

An individual is non-resident in India in any financial year if the taxpayer does not fulfil any of the above-mentioned conditions required for a resident but not ordinarily resident and an ordinary resident. To know more about the concept of slump sale in Income Tax, click

slump sale

.

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Frequently Asked Questions

Common questions about Residential Status for Income Tax.

Residential status determines an individual's income tax liability and the applicable tax rates. It is based on the number of days the person has stayed in India during the current financial year and the preceding four years.
The three categories of residential status are: (1) Resident but not ordinarily resident, (2) Ordinarily resident, and (3) Non-resident.
An individual is considered a "Resident but Not Ordinarily Resident" if they satisfy either of these two conditions: (a) They are in India for 182 days or more in the financial year, or (b) They have been in India for at least 365 days in the preceding four years and are in India for 182 days or more in the current financial year.
A person is an "Ordinary Resident" if they do not meet the conditions for being a "Resident but Not Ordinarily Resident" or a "Non-Resident." In other words, they are a resident who does not fall under the specific criteria for the other two categories.
Residential status determines the income that is taxable in India and the applicable tax rates. For example, a non-resident is typically taxed only on their Indian-sourced income, while a resident is taxed on their global income.
Yes, an individual's residential status can change from one financial year to another, depending on the number of days they spend in India and their residential status in the preceding four years.
Yes, residential status is crucial when filing income tax returns. Taxpayers must declare their applicable residential status in their tax return, as it determines their taxable income and the applicable tax rates.
Yes, it is possible for an individual to be considered a non-resident even if they stay in India for less than 182 days in a financial year, provided they do not meet the other conditions for being a resident (either "Resident but Not Ordinarily Resident" or "Ordinary Resident").