In this guide, readers will clearly understand NRI, RNOR, and ROR residential status—how the 182-Day Rule works, and the global tax risks that come with each category. A simple, practical breakdown of “NRI, RNOR, ROR: The 182-Day Rule & Global Tax Risk.”
I. Introduction: The 182-Day Rule & Global Income
Here’s the truth most Indians abroad don’t realize until it’s too late:
Your tax liability in India depends on the number of days you spend in the country — not your passport.
You could be:
- an Indian citizen,
- an OCI cardholder,
- a US/UK citizen of Indian origin, or
- a foreign national —
and still become a global taxpayer in India simply by crossing day-count limits.
The Financial Risk
If you miscalculate your residential status:
- your foreign salary
- US 401(k)/Roth IRA
- UK Pension
- foreign capital gains
- foreign rental income
may suddenly become taxable in India.
The Roadmap: Three Possible Statuses
Under Indian tax law, you fall into one of these:
- NRI – Non-Resident
- RNOR – Resident but Not Ordinarily Resident
- ROR – Resident and Ordinarily Resident
Your entire tax outcome depends on this.
OCI cardholders and foreign nationals generally follow the same residential status rules as Indian citizens, but there are important exceptions:
- For Indian citizens visiting India, the 182-day threshold replaces the old 60-day rule for low-income (<₹15 lakh) cases.
- For OCI/PIO cardholders and foreign nationals, the 60-day rule still applies in these situations.
- Deemed residency provisions apply only to Indian citizens, not OCIs/PIOs.
II. Residential Status & Tax Scope: The Definitive Rules (Section 6)
Your residential status determines the scope of your tax liability in India. As defined by Section 6 of the Income Tax Act, residency is a two-step process: first, determining if you are a Resident (based on current year’s stay), and second, determining if that Resident is Ordinarily Resident (ROR) or Not Ordinarily Resident (RNOR) (based on historical stay). The table below details the specific day-count and income conditions that trigger each status, as well as the crucial financial impact—which foreign incomes become taxable.
| Category | Condition / Rule | Explanation | Resulting Status |
|---|---|---|---|
| Primary NRI Test | Stay in India ≤181 days in FY | Automatic NRI, regardless of income | ✅ NRI |
| High-Income Rule (Indian income > ₹15 lakh) | Stay ≥120 days in FY AND stay ≥365 days in preceding 4 FY | Triggers Resident status for high-income Indians/PIOs/OCIs | ✅ Resident → Check RNOR/ROR |
| Low-Income Rule (Indian income ≤ ₹15 lakh) | Stay ≥182 days in FY | Triggers Resident status; 182-day threshold replaces old “60-day rule” | ✅ Resident → Check RNOR/ROR |
| RNOR Test (if Resident) | Must fail both ordinary residence tests: 1. Resident ≥2 out of 10 preceding FY 2. Stayed >729 days in preceding 7 FY | Acts as a temporary tax shield for returning NRIs/OCIs | ✅ RNOR |
| ROR Test (if Resident) | Must satisfy both ordinary residence tests: 1. Resident ≥2 out of 10 preceding FY 2. Stayed >729 days in preceding 7 FY | Fully settled in India, global taxation applies; mandatory foreign asset reporting | ✅ ROR |
*Note: 1. Indian citizens in zero-tax countries (e.g., UAE/Bahrain) with Indian income > ₹15 lakh are deemed RNOR even if they spend 0 days in India. 2. 182-day rule replaces 60-day test only for Indian citizens. Foreigners/OCI/PIOs still follow the 60-day rule. Deemed residency applies only to Indian citizens.
III. TDS: The Practical Impact of Your Status
A.🔥 Taxation Comparison for ROR, RNOR, and NRI
| Category | ROR | RNOR | NRI |
|---|---|---|---|
| Example | Lives permanently in India, spends >182 days yearly | Returned from abroad, stayed >182 days, but not “Ordinarily Resident” | Lives abroad full-time, visits India <182 days/year |
| Indian Income (Salary earned in India) | ✔️ Taxable | ✔️ Taxable | ✔️ Taxable |
| Indian Income received in India | ✔️ Taxable | ✔️ Taxable | ✔️ Taxable |
| Interest on NRO Account | ✔️ Taxable | ✔️ Taxable | ✔️ Taxable |
| Interest on NRE / FCNR Account | ✔️ Taxable | ❌ Tax-free | ❌ Tax-free |
| Capital Gains on Indian assets (property, shares, mutual funds) | ✔️ Taxable | ✔️ Taxable | ✔️ Taxable |
| Foreign Salary received abroad | ✔️ Taxable | ❌ Not taxable | ❌ Not taxable |
| Foreign interest income | ✔️ Taxable | ❌ Not taxable | ❌ Not taxable |
| Foreign capital gains | ✔️ Taxable | ❌ Not taxable | ❌ Not taxable |
| Foreign rental income | ✔️ Taxable | ❌ Not taxable | ❌ Not taxable |
| Money kept in foreign bank accounts | ✔️ Must be reported | ❌ Not taxable / no reporting | ❌ Not taxable / no reporting |
| Foreign business income | ✔️ Taxable | ❌ Only taxable if business controlled in India or profession set up in India | ❌ Not taxable |
If you’re unsure how each account behaves when your status changes from NRI → RNOR → ROR, you can check our complete guides on how an NRE account works, what an NRO account is used for, and how FCNR deposits function across different tax years.
B. Why TDS Is High for NRIs and RNORs
Banks and payers must deduct:
- 30% on NRO interest
- 20–30% on property sale proceeds
- 31.2% on rent
Because they cannot estimate your final tax slab.
C. Excess TDS Refund
Only possible through:
- ITR-2 filing
- Checking Form 26AS
D. DTAA Benefits (Applies to NRIs & OCIs)
To reduce TDS at source, provide:
- Tax Residency Certificate (TRC)
- Form 10F
- Self-declaration
IV. Essential Planning & Compliance Checklist
- Income Tax Act taxes income
- FEMA regulates bank accounts and money movement
- Convert resident accounts to NRE/NRO after becoming NRI/OCI
- NRE interest = tax-free
- NRO interest = taxable
- Track all your TDS in Form 26AS
V. Conclusion & Next Steps
The 182-day rule determines whether your foreign income remains tax-free or becomes fully taxable in India.
- Stay abroad → NRI → No global tax
- Returning home → RNOR → Temporary tax shield
- Settle fully → ROR → Global taxation
Recommendation
If you’re close to the 120-day or 182-day thresholds, or planning to move back, consult a qualified international tax CA.
Disclaimer: This article is for informational purposes only. Regulations can change, and individual situations may vary. Always verify details before making decisions.
