Rohit got a Dubai offer in September. Joined his new employer on October 5, 2025. He spent April–September in India on his old job (Indian salary, TDS deducted), then moved. From Oct onward, he gets paid in dirhams by a UAE entity. He visits home for Diwali (1 week) and again in February (10 days).
His questions are everyone's questions:
- Am I an NRI now? From which date?
- Do I owe Indian tax on my UAE salary?
- What about the salary I already earned in India this year?
- Should I close my Indian bank, my mutual funds, my PPF?
- India doesn't do "split year" tax treatment. For the whole financial year, you're either Resident, or RNOR, or Non-Resident — based on day counts, not on what you "feel".
- Section 6 has one main test (≥182 days in India in the PY) and one secondary test (60+365 — being in India ≥60 days in PY and ≥365 days in the previous 4 years).
- For Indian citizens leaving for employment outside, the secondary test is relaxed to 182 days in PY. This is the saving grace for most people moving abroad mid-year.
- For high earners (Indian income > ₹15L) who aren't taxable elsewhere, the deemed resident rule (Sec 6(1A), from FY 2020-21) brings you back into the net — as RNOR.
- For Rohit moving Oct 5: he'll be Resident for FY 2025-26 (188 days in India). UAE salary earned in dirhams while he is in UAE is foreign income — but Resident status means it's taxable in India unless DTAA helps. From FY 2026-27 he'll be NR if he stays away ≥183 days.
The day-counting rules — exact text, simplified
Section 6 of the Income Tax Act is shorter than its reputation. Here's all of it that matters for an individual.
Were you in India for 182 days or more during this previous year (1 April to 31 March)? Yes → Resident. No → go to Test 2.
Were you in India for 60 days or more in this PY AND 365 days or more in the 4 PYs immediately before? Yes → Resident. No → Non-Resident.
If you're an Indian citizen leaving India during the PY for the purpose of employment outside India — replace "60 days" with "182 days" in Test 2. Same relaxation if you're an Indian citizen / PIO visiting India.
If you're an Indian citizen / PIO visiting India, AND your Indian-source income exceeds ₹15 lakh in the PY — the 182-day relaxation becomes 120 days. (Doesn't apply to people leaving for employment, only people visiting.)
If you're an Indian citizen, your Indian-source income exceeds ₹15L, and you are not liable to tax in any other country by reason of residence — you become a deemed Resident, but classed as RNOR. This was added in FY 2020-21 mainly to catch high-earners "drifting" tax-free across the Gulf.
R, RNOR, NR — what the labels actually mean for your tax
Resident & Ordinarily Resident
R-OR
Global income taxable in India. Salary earned abroad, capital gains on foreign shares, foreign rental income — all of it. Form 67 + DTAA claim to avoid double taxation.
Resident but Not Ordinarily Resident
RNOR
Indian income taxable. Foreign income taxable only if derived from a business controlled from India or a profession set up in India. Everything else foreign — exempt. The friendliest of the three.
Non-Resident
NR
Only Indian-source income is taxable. Salary earned abroad, dividends from foreign companies — all outside the net. Indian rent, Indian capital gains, Indian interest — taxed.
The "Ordinarily" qualifier — when does R become RNOR?
You're an "Ordinarily Resident" if you're Resident under Section 6 AND both of these are true:
- You were a Resident in at least 2 out of the 10 preceding years.
- You were in India for at least 730 days in the 7 preceding years.
Miss either → you're RNOR. New migrants typically spend their first 2–3 years as RNOR before turning R-OR. People returning to India after long stays abroad also enjoy RNOR status for a few years.
Rohit's actual map
Let's count Rohit's days for FY 2025-26 (1 Apr 2025 to 31 Mar 2026).
- 1 Apr to 4 Oct 2025 in India = 187 days
- 5 Oct to 31 Mar 2026 in UAE = 178 days
- Diwali visit: 1 week (within UAE side) = +7 days in India
- February visit: 10 days = +10 days in India
- Total days in India: 187 + 7 + 10 = 204 days
204 days > 182. Rohit is Resident for FY 2025-26. The 60-day relaxation for "leaving for employment" doesn't help him here — he crossed even the 182-day bar.
Now the RNOR check. Assume Rohit has been in India continuously his whole life till this year — so he easily meets the 2-of-10 and 730-of-7 conditions. He is R-OR for FY 2025-26. His UAE salary from Oct to March is taxable in India.
For FY 2026-27, if Rohit stays in UAE the whole year and visits India only briefly (say, 30 days total), he's NR — and his UAE salary is outside the Indian tax net. One full year matters more than people realise.
If you move abroad before 28 September in a financial year — and don't come back — you can be NR for that year (you'll have under 182 days). If you move after, you're Resident for that year. The difference is significant. People timing big offshore postings sometimes negotiate start dates around this.
What Rohit owes (and how to avoid paying twice)
For FY 2025-26, his Indian return must include:
- Indian salary, April-September — included normally. TDS already deducted.
- UAE salary, October-March — included as "salaries" under Schedule S. Convert dirhams at SBI TTBR on the last day of each month (or other approved rate).
- Interest on Indian savings + FDs — Schedule OS, taxable.
- Mutual fund dividends / capital gains — Schedule CG, taxable.
- Foreign bank balance, foreign salary account in UAE — disclose in Schedule FA. This is mandatory for R-OR. Penalty for non-disclosure: ₹10 lakh under Black Money Act, even if no tax is due.
UAE doesn't levy personal income tax — so there's no DTAA credit to claim under Sec 90/Form 67. The full UAE salary is taxable in India in this year. Painful, but legal.
The PPF, mutual funds, and bank account housekeeping
- PPF: existing accounts can be continued until maturity but cannot be extended. NRIs cannot open new PPF accounts. Letter to your branch to update status helps.
- Bank accounts: resident savings accounts must be redesignated as NRO (for Indian income) and a new NRE account opened (for foreign remittances). FEMA, not optional.
- Mutual funds: KYC must be updated to NRI status. Some AMCs don't accept investments from NRIs based in the US / Canada (FATCA reasons). Existing investments continue but with NR tax rules.
- Demat account: resident demat must be closed and a separate NRO/NRE demat opened. Existing shares can be transferred. NRIs have separate trading rules.
- Income tax e-filing: update your address in the portal. Aadhaar-PAN linkage continues. Mobile number can remain Indian or be replaced.
The funny historical wrinkle
Until 2020, an Indian citizen could plausibly hold a passport, leave India for "consulting work" in Dubai or Singapore, register a UAE company, never pay tax there (because UAE didn't levy personal tax), spend most of the year abroad, and avoid Indian tax too. India fixed this with Sec 6(1A) — the "deemed resident" rule. If your Indian-source income is ₹15L+ and you're not taxable anywhere else, India taxes you on Indian-source income as if you were RNOR.
The fix is narrower than it looks (only Indian-source income, only at RNOR level), but politically it ended the most theatrical version of "stateless tax residence" that some HNI families had built.
Quick answers
No — the test is reapplied every year. Once you settle abroad, you'll naturally fail the 2-of-10 / 730-of-7 conditions and drop to RNOR, then NR. Conversely, NRIs returning to India enjoy RNOR status for 2–3 years before becoming R-OR.
The place of accrual of salary is where the services are rendered. If you work in UAE, the salary "accrues" there even if it's paid into an Indian bank. What matters is residential status, not the payment route.
The status of NR exempts foreign salary. Within "Resident", no country exemption applies — you're taxed on global income. DTAA may give credit for foreign tax paid (Sec 90), but DTAAs do not exempt income that India has the right to tax under domestic law.
Yes, almost certainly. You're physically in India >182 days. Salary accrues where services are rendered (India). It's Indian-source salary, taxable in India, regardless of where the employer is. UK won't tax it (you're an NR there). One-country taxation, on your full salary.
Sec 270A — under-reporting (50%) or misreporting (200%) penalty. Plus the tax + interest. Plus Schedule FA failure to disclose: ₹10L under Black Money Act. Plus possible Sec 148 reassessment for up to 10 years. Get residential status right.
When you might want help
Two situations: (1) The year you actually move — getting the day count right, deciding whether to time the move, planning the salary structure on the new offer. (2) The year you return to India — RNOR status protects you for 2–3 years if you plan it right.
Moving abroad or coming back?
We map your residential status across years, plan the bank/demat redesignations, file Schedule FA correctly, and claim every DTAA credit you're entitled to. Fixed scope, fixed fee.
"Rohit" is a composite illustration. Day counts and outcomes shown apply the law as written; your facts will differ.