NRI Tax Residency Examples – Real Scenarios Explained
Understanding Indian tax residency rules can be confusing, especially when multiple visits, income conditions, and special cases are involved. These NRI tax residency examples explain how residential status is determined in real-life situations.
The examples below cover common scenarios faced by NRIs, Gulf residents, returning Indians, and frequent travelers.
Example 1: Gulf NRI with Multiple Short Visits
- April–May visit: 45 days
- August visit: 30 days
- December visit: 35 days
Indian income < ₹15 lakh
Status: NRI (Non-Resident)
Example 2: High-Income NRI Triggering 120 Day Rule
- Indian income: ₹22 lakh
- Total stay in India: 128 days
Since Indian income exceeds ₹15 lakh and stay is more than 120 days, the 120-day rule applies.
Example 3: NRI Staying Just Below 182 Days
- Total stay in India: 181 days
Even though the stay is close to the limit, it does not cross 182 days.
Example 4: Returning Indian Qualifying as RNOR
- Stay in India during the year: 200 days
- Stayed outside India for 9 out of last 10 years
Though the individual becomes Resident (stay > 182 days), they qualify as RNOR due to past non-resident history.
Example 5: OCI Holder with Frequent India Visits
- Total stay in India: 150 days
- Indian income below ₹15 lakh
The 120-day rule does not apply because income is below the threshold.
Example 6: Seafarer with Irregular Travel Pattern
- Multiple embarkation and disembarkation dates
- Total stay in India: 95 days
Days spent outside India on duty are excluded from the count.
Key Takeaways from These Examples
- Residential status is determined yearly.
- Income level matters for the 120-day rule.
- Arrival and departure days are always counted.
- RNOR status provides transitional relief.
How to Check Your Own Residential Status
Manual calculations are error-prone, especially with multiple visits. Automated tracking helps avoid accidental status changes.
Frequently Asked Questions
Can residential status change every year?
Yes. It is determined separately for each financial year.
Does one extra day really matter?
Yes. Crossing the threshold by even one day can change your status.
Are these examples applicable to all NRIs?
They cover common scenarios, but individual cases may vary.
Conclusion
Understanding NRI tax residency through real examples helps avoid costly mistakes. Accurate tracking and proper planning are essential for compliance and peace of mind.