Modified Basic Condition for High-Income Indian Citizens / PIOs visiting India
# The 120-Day Rule — Modified test for Indian Citizens / PIOs with income > Rs. 15 lakhs
## Background
This is a special rule for Indian citizens or Persons of Indian Origin (PIOs) visiting India during a PY, whose total income (other than foreign source income) exceeds Rs. 15 lakhs.
Such a person can become resident in India under two routes:
## Route 1 — Normal Test
Stays in India for 182 days or more in the PY.
Need to check Additional Conditions → may become ROR.
## Route 2 — Modified Test (Section 6(1A)/(6)(d) construct)
Stays in India for 120 days or more (but less than 182) in the PY, AND
Stays in India for 365 days or more in the 4 preceding PYs.
No need to check Additional Conditions.
He is ALWAYS R-NOR (Resident but Not Ordinarily Resident).
## Comparison
Test
Days in PY
4 PYs
Additional Conditions
Possible status
Normal
≥ 182
—
Check
ROR or R-NOR
Modified
120 to 181
≥ 365
NOT checked
Always R-NOR
## What is "Income from Foreign Source"?
Income which accrues or arises outside India, but shall NOT include:
1. Income which is deemed to accrue or arise in India (Sec 9).
2. Income derived abroad from a business controlled from India.
3. Income derived abroad from a profession set up in India.
In other words, the Rs. 15 lakh threshold is tested against Indian-source income + globally controlled Indian business/profession income + deemed Indian income. Truly foreign income is excluded from the threshold calculation.
Worked example
### Example 1
Q. Mr. A, an Indian citizen residing in USA, visits India for 130 days in PY 2025-26. His income from a property in Mumbai is Rs. 20 lakhs (other than foreign source). In the preceding 4 PYs, he stayed 380 days in India. What is his status?
A. Since his income (other than foreign source) > Rs. 15 lakhs, the modified test applies. He stayed 120 ≤ 130 < 182 days AND 380 ≥ 365 days in last 4 PYs. Therefore he is R-NOR (no need to check Additional Conditions).
### Example 2
Q. Same Mr. A as above, but his Indian-source income is only Rs. 10 lakhs.
A. Since income ≤ Rs. 15 lakhs, the 120-day modified test does NOT apply. Only Basic Condition 1 (182 days) is tested for him as a PIO visitor. 130 < 182 → Non-Resident.
### Example 3
Q. Mr. B (PIO, US citizen) earns Rs. 25 lakh from a profession set up in India but operated from USA. Is this income excluded from the Rs. 15 lakh threshold?
A.No. Income derived abroad from a profession set up in India is specifically EXCLUDED from the definition of 'foreign source income'. So it counts toward the Rs. 15 lakh threshold.
⚠️ Common exam mistakes
Treating the 120-day rule as making the person ROR — it ALWAYS results in R-NOR status.
Applying the 120-day rule to anyone — it only applies to Indian citizens / PIOs visiting India with non-foreign-source income > Rs. 15 lakhs.
Including income deemed to accrue in India, or income from Indian-controlled business / Indian-set-up profession, as 'foreign source income' — these are specifically EXCLUDED.
Forgetting to check the 365-day condition in the modified test (both 120 days in PY AND 365 days in last 4 PYs must be satisfied).
Bare-Act text Section 6(1)(c) Explanation 1(b), Section 6(6)(d) · Income-Tax Act, 1961 · click to expand
Section 6(1A) and Section 6(6)(d) — In the case of a citizen of India, or a person of Indian origin, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year, who has been in India for a period or periods amounting in all to 120 days or more but less than 182 days, and 365 days or more in the four preceding years — he is treated as resident but not ordinarily resident.