Blog Returning NRI Esop Tax Guide
India-specific preparation guide
Blog Returning NRI Esop Tax Guide needs current-law checks, portal verification, documents and a precise brief before you compare experts on WorkIndex.
Post Your Requirement - FreeSection 6 Residency Status Criteria (AY 2026-27)
Determining whether an individual qualifies as a Non-Resident Indian (NRI) or Resident but Not Ordinarily Resident (RNOR) is governed by Section 6 of the Income-tax Act, 1961. Use this verified guide to check physical stay rules.
| Residential category | Stay criteria in India (FY) | Taxation impact |
|---|---|---|
| Resident & Ordinarily Resident (ROR) | Stay of 182 days or more in India during the FY, OR stay of 60 days or more in the FY AND 365 days or more in the 4 preceding FYs. | Global income is taxable in India under Section 5. |
| Non-Resident Indian (NRI) | Stay of less than 182 days in India during the FY (and does not meet the 60 days + 365 days test). | Only income received, accrued, or deemed to receive/accrue in India is taxable. |
| Indian Citizen / PIO Visitor Exception | The 60-day threshold is extended to 182 days if Indian-sourced income is up to Rs. 15 Lakh, and to 120 days if Indian-sourced income exceeds Rs. 15 Lakh. | If stay is between 120 and 181 days, they are classified as RNOR. |
| Deemed Resident (Section 6(1A)) | Indian citizen with Indian-sourced income > Rs. 15 Lakh who is not liable to tax in any other country. Automatically RNOR. | Foreign income is not taxable in India. Only Indian-sourced income is taxed. |
What a serious tax expert should verify
- Physical stay day-wise log based on passport entry and exit stamps (both arrival and departure days count as full days).
- Financial Year basis: Days of stay must be calculated on a Financial Year basis (April 1 to March 31) and not the Calendar Year.
- RNOR (Resident but Not Ordinarily Resident) benefits: Active if non-resident in 9 out of 10 preceding years, OR stay in India <= 729 days in 7 preceding years.
- Transition under Income Tax Act, 2025: Verify if new definitions affect Tax Year 2026-27 stay requirements.
Documents to prepare for verification
- Passport (all pages with entry/exit stamps for the last 5 financial years).
- FCCS / residency proof in the foreign country.
- Annual Information Statement (AIS) and Form 26AS to track Indian income transactions.
- Detailed day count excel sheet reconciling passport stamps.
Blog Returning NRI Esop Tax Guide: year and source check
Last fact-checked: 18 June 2026.
AY 2026-27 means FY 2025-26 income and is filed under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two.
Verify stay days, TRC validity, DTAA rates, NRO interest, and Form 15CA/15CB requirements against official CBDT guidelines, notifications, and portal utilities before taking a filing position.
FAQs
How is the number of days of stay in India calculated?
The calculation is based on actual physical stay in India during the financial year (April 1 to March 31). Both the day of arrival and day of departure in India are counted as full days of stay.
What is the deemed residency rule under Section 6(1A)?
Introduced in the Finance Act, an Indian citizen is deemed a resident of India if their Indian-sourced income exceeds Rs. 15 Lakh and they are not liable to tax in any other country by reason of domicile, residence or similar criteria. They are classified as RNOR.
Is global income taxable for an RNOR in India?
No. Resident but Not Ordinarily Resident (RNOR) individuals are taxed in India only on Indian-sourced income (received or accrued in India) and income from a business controlled or profession set up in India. Their foreign-sourced income is exempt.