NRI: Non-Resident Indian

Under Section 6 of the Income Tax Act, 1961, an individual's residential status is determined by physical presence in India during a financial year (April 1 to March 31). The primary rule is straightforward: if you spend fewer than 182 days in India in a given financial year, you are generally classified as a Non-Resident Indian for that year. Residential status is assessed each year independently, so a person can move between resident and non-resident status from year to year.\n\nThe Finance Act 2020 introduced an additional rule, effective from Assessment Year 2021-22, relevant to Indian citizens or Persons of Indian Origin (PIOs) whose total income from sources other than foreign sources exceeds INR 15 lakh. For such individuals, the secondary 60-day threshold is substituted with 120 days under Section 6 of the Act. This is a specific carve-out; the standard 182-day rule remains the primary test for most NRIs.\n\nIndia's Income Tax Bill 2025, introduced in parliament on 13 February 2025, proposes to simplify the residency framework with effect from April 1, 2026. The proposed rules retain the core 182-day threshold and remove the older 60-day plus 365-day-over-four-years secondary test. These changes are not yet in force; consult a qualified cross-border tax adviser to understand how the transition may affect your specific position. This is not tax advice.

For Indian expats living in the GCC - whether in the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, or Oman - NRI status has direct implications for how Indian-sourced income is taxed by India's Income Tax Department. As an NRI, Indian tax liability is generally limited to income that arises or accrues in India. Income earned in the GCC and remitted to India is not automatically subject to Indian tax, but the rules around what counts as Indian-sourced income are specific and detailed. Always consult a qualified cross-border tax adviser before making any filing decisions.\n\nNRI status also governs which bank accounts you are permitted to hold in India (for example, NRE and NRO accounts), investment restrictions under the Foreign Exchange Management Act (FEMA), and eligibility for certain double-tax treaty provisions. If you make frequent extended trips to India - for family reasons, business, or ahead of a planned return - tracking your day count carefully each financial year is essential. Exceeding the 182-day threshold, or the 120-day threshold if the higher-income rule applies to you, can shift your status to resident for that year with significant tax consequences. Consult a tax adviser.