How your days in India are counted, and the 120-day rule

Your residency turns entirely on days. Under Section 6, you are resident in India for a year if either of two tests is met: you are in India for 182 days or more in that year, or you are in India for 60 days or more in that year and for 365 days or more across the four preceding years. For an NRI visiting India, the second, easier-to-trip 60-day test is normally relaxed up to 182 days, which is why the safe figure has long been thought of as 182.

The trap arrived with a 2020 change, effective from the 2021-22 year. For a visiting Indian citizen or person of Indian origin whose Indian income, counting everything except foreign-source income, is more than ₹15 lakh, that relaxed figure was cut from 182 to 120 days. So a high-earning visitor who stays 120 days or more, even if well under 182, becomes resident for the year. This catches exactly the people who tend to spend long stretches in India, those with significant Indian income from property, business or investments. Note this is separate from another rule, the deemed-resident rule, which can catch an Indian citizen with over ₹15 lakh of Indian income who is not taxed anywhere in the world, covered on its own page.

There is an important cushion. A person who becomes resident only because of the 120-day rule is treated not as an ordinary resident but as Resident but Not Ordinarily Resident. That status matters a great deal, because an RNOR is not taxed on foreign income, only on Indian income. So being pulled into residency by the 120-day rule does not suddenly expose your overseas salary or investments, it mainly means your Indian income is taxed as a resident's. The same not-ordinarily-resident status generally applies for the first years after a returning NRI moves back, under separate tests based on your recent years abroad.

How the days themselves are counted has its own catch, because the margins can be tight. The safe, conservative convention, and the one the tax department applies, is that both the day you arrive in India and the day you leave count as days spent in India, so a part-day at each end still counts as a full day. There is a taxpayer-favourable position, supported by some tribunal decisions, that the day of arrival can be excluded, but it is contested, so you should not plan on it. When you are close to a threshold, count both ends and keep a clear record of your travel dates from your passport. A practising CA works out your residency correctly, including whether the 120-day rule catches you and whether the not-ordinarily-resident cushion protects your foreign income.