Your residential status determines how much of your income India can tax. An ROR (Resident and Ordinarily Resident) pays tax on worldwide income. An NR (Non-Resident) pays tax only on India-sourced income. RNOR sits in between. Get this classification wrong and your entire tax computation is off — which is why Section 6 is the first thing examiners test.
Step 1 — Is the individual a Resident? Satisfy either basic condition:
- Basic Condition 1: Present in India for 182 days or more in the previous year, OR
- Basic Condition 2: Present for 60 days or more in the current year AND 365 days or more in the preceding 4 years.
Critical exception: if the person is an Indian citizen leaving India for employment abroad, or an Indian citizen / Person of Indian Origin (PIO) visiting India, the 60-day threshold in Basic Condition 2 is replaced by 182 days. This protects NRIs who visit family from accidentally becoming Residents.
Step 2 — ROR or RNOR? Once you've confirmed the person is Resident, check Section 6(6). The person is RNOR if either condition below is met:
- Was a Non-Resident in 9 out of the 10 preceding previous years, OR
- Stayed in India for 729 days or fewer in the preceding 7 years.
If neither RNOR condition applies → the person is ROR.
For HUF, firms, and AOPs: Resident by default, unless control and management is wholly outside India. The word wholly is key — even partial control in India makes them Resident.
For companies: An Indian company is always Resident. A foreign company becomes Resident if its Place of Effective Management (POEM) — where real key decisions are made — is in India.
Finally, Section 6(5) says: if you're Resident for one source of income, you're Resident for all your income sources that year. No cherry-picking.
This section is tested frequently as a 4 to 6 mark question — usually a classification problem with day counts, or a short theory question on RNOR conditions.
📊 Worked example
Example 1: Step-by-step individual classification
Mr. Rajesh Mehta, Indian citizen (not going abroad for employment), was in India for:
- PY 2025-26: 190 days
- Preceding 4 years combined: 400 days
- Preceding 7 years combined: 800 days
- He was Non-Resident in 7 out of the 10 preceding previous years.
Classify his residential status for AY 2026-27.
Working:
Step 1 — Is he Resident?
- Basic Condition 1: 190 days ≥ 182 days → Satisfied ✓
(Even if BC1 is satisfied, we stop here — no need to check BC2.)
→ He is a Resident.
Step 2 — ROR or RNOR? [Section 6(6)]
- Condition (a): NR in 9/10 preceding years? He was NR in only 7/10 → Not met
- Condition (b): ≤ 729 days in preceding 7 years? He stayed 800 days → Not met
Neither RNOR condition is satisfied → He is ROR.
Final Answer: Rajesh is Resident and Ordinarily Resident (ROR) for AY 2026-27. His global income, including ₹12,00,000 salary from a UAE client, is taxable in India.
---
Example 2: NRI visiting India — the 60-day exception
Ms. Ananya Iyer, Indian citizen settled in the UK, visits India in PY 2025-26 for 110 days. In the preceding 4 years, she was in India for a total of 400 days. She has been Non-Resident for the last 10 consecutive years.
Working:
Step 1 — Is she Resident?
- Basic Condition 1: 110 days < 182 days → Not satisfied
- Basic Condition 2: Normally 60-day threshold applies. BUT she is an Indian citizen visiting India from abroad → threshold rises to 182 days. Her 110 days < 182 days → Not satisfied
→ She is a Non-Resident (NR).
Final Answer: Ms. Iyer is Non-Resident for AY 2026-27. Only her India-sourced income (e.g., ₹3,50,000 rent from a Mumbai flat) is taxable in India. Her UK salary of ₹85,00,000 is exempt.
⚠️ Common exam mistakes
- Mixing up 182 and 60 days: Students apply 182 days to Basic Condition 2 even for ordinary residents. Remember — 182 days is a standalone test (BC1); 60 days only appears in BC2 and only for the general case.
- Forgetting the NRI exception: When an Indian citizen visits India from abroad (or leaves for employment), the 60-day limit in BC2 becomes 182 days. Many students apply 60 days universally and wrongly classify NRIs as Residents.
- Requiring BOTH RNOR conditions: The RNOR test in Section 6(6) is OR, not AND. If either condition (NR in 9/10 years, or ≤ 729 days in 7 years) is satisfied, the person is RNOR. Don't require both.
- Saying foreign companies are always Non-Resident: Since POEM rules were introduced, a foreign company whose key decisions are made in India is treated as Resident. Always check POEM in company problems.
- Ignoring the word 'wholly' for HUF/firms: Students write 'control and management outside India = Non-Resident.' Wrong — it must be wholly outside India. If even one partner operates from India, the firm is Resident.
📖 Bare Act text — Section 6, Income Tax Act 1961
(click to expand)
For the purposes of this Act— (1) An individual is said to be resident in India in any previous year, if he— (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. Explanation 1.— In the case of an individual— (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted. Explanation 2.— For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed. (2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India. (3) A company is said to be a resident in India in any previous year, if— (i) it is an Indian company; or (ii) its place of effective management, in that year, is in India. Explanation.— For the purposes of this clause "place of effective management" means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made. (4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India. (5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income. (6) A person is said to be "not ordinarily resident" in India in any previous year if such person is— (a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous 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 (b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous 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.
Test yourself
Practice questions on this section, AI-graded with citations.
⚡ Practice now →