Section 6
Section 6: residence in India
Section 6 determines a person's residential status for a tax year - resident, non-resident, or (for individuals and HUFs) "not ordinarily resident". This status feeds directly into section 5, which decides how much of a person's worldwide income is taxable in India.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Basic tests for individuals
Under Section 6(2), an individual is resident in India in a tax year if he/she is in India for 182 days or more in that tax year, or is in India for 60 days or more in that tax year and has been in India for 365 days or more cumulatively in the four tax years immediately preceding it.
Section 6(3) relaxes the 60-day limb for a citizen of India who leaves India in the tax year as a crew member of an Indian ship or for employment outside India.
Section 6(4) and 6(5) relax the 60-day limb (extending it to 120 days) for a citizen of India or person of Indian origin who is outside India and visits India, if their total income other than foreign-source income exceeds fifteen lakh rupees during the tax year.
Deemed residency for high-income citizens not taxed anywhere
Section 6(7) deems an individual to be resident in India for a tax year if he/she (a) is a citizen of India, (b) is not liable to tax in any other country or territory by reason of domicile, residence or similar criteria, and (c) has total income (other than foreign-source income) exceeding fifteen lakh rupees during that tax year. This deeming rule does not apply if the person is already resident under the ordinary tests in sections 6(2) to 6(6) (section 6(8)).
HUFs, firms, companies and other persons
A Hindu undivided family, firm or other association of persons is resident in India in a tax year unless the control and management of its affairs is situated wholly outside India during that year (section 6(9)).
A company is resident in India if it is an Indian company, or if its "place of effective management" is in India in that tax year - meaning the place where key management and commercial decisions necessary for the conduct of the business as a whole are, in substance, made (section 6(10)).
Every other person is resident in India unless the control and management of its affairs is situated wholly outside India during the tax year (section 6(11)).
Section 6(12) provides that if a person is resident in India for a tax year for any one source of income, that person is treated as resident in India for that tax year for all other sources of income too.
"Not ordinarily resident"
Section 6(13) sets out when a resident individual (or HUF, by reference to its manager) is treated as "not ordinarily resident" rather than fully resident. This status matters because, under section 5(1), a person who is not ordinarily resident is taxed on foreign income only if it is derived from a business controlled in, or a profession set up in, India.
| Category | Condition for "not ordinarily resident" |
|---|---|
| Individual / HUF manager (general test) | Has been a non-resident in India in 9 out of the 10 tax years preceding the relevant tax year, or has been in India for 729 days or less (cumulatively) in the 7 tax years preceding the relevant tax year |
| Citizen of India / person of Indian origin (visiting) | Total income (excluding foreign-source income) exceeds ₹15,00,000 in the tax year, and has been in India for 120 days or more but less than 182 days during the tax year |
| Citizen of India deemed resident | Is deemed to be resident in India under section 6(7) (the high-income, taxed-nowhere-else rule) |
"Income from foreign sources" - the defined term
Section 6(14) defines "income from foreign sources" as income which accrues or arises outside India (other than income from a business controlled in, or profession set up in, India) and which is not deemed to accrue or arise in India. This is the term used in the ₹15,00,000 thresholds and in the not-ordinarily-resident foreign-income rule under section 5.
Frequently asked questions
How many days in India make an individual a resident?
182 days or more in the tax year, or 60 days or more in the tax year combined with 365 days or more cumulatively across the preceding four tax years (subject to the relaxations for Indian citizens leaving for employment/as ship crew, and for visiting citizens/persons of Indian origin).
Can a person be treated as resident in India even without meeting the day-count tests?
Yes - Section 6(7) deems a citizen of India to be resident in India if they are not liable to tax anywhere else by reason of domicile or residence, and their total income (excluding foreign-source income) exceeds ₹15,00,000 in the tax year, provided they don't already qualify as resident under the ordinary tests.
What does 'not ordinarily resident' mean and why does it matter?
It's a sub-category of resident individuals/HUFs (defined in section 6(13)) who meet certain thresholds of past non-residence or limited presence in India. Under section 5(1), a not-ordinarily-resident person's foreign income is taxed in India only if it comes from a business controlled in, or profession set up in, India - unlike a fully "ordinarily resident" person, who is taxed on all foreign income.
How is a company's residential status determined?
A company is resident in India if it is an Indian company, or if its "place of effective management" - where key management and commercial decisions for the business as a whole are, in substance, made - is in India during that tax year.
Related sections
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Get your residential status and NRI tax position reviewedLast updated 9 September 2026