Your tax status in India

The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961; residential status under its section 6 applies to tax years beginning on or after that date.

Residential status for any tax year beginning before 1 April 2026 (up to FY 2025-26) is still decided under section 6 of the 1961 Act.

An individual is resident in India for a tax year if in India 182 days or more in that year, or 60 days or more in that year plus 365 days or more in the preceding four years (Act 2025 s.6(2); same test as Act 1961 s.6(1)).

The 60-day plus 365-day limb does not apply to an Indian citizen who leaves India in the tax year for employment outside India (or as crew of an Indian ship); such a citizen becomes resident only on the 182-day test. The official text says 'employment' and does not mention self-employment or freelancing.

For an Indian citizen or person of Indian origin visiting India from abroad, the 60-day limb becomes 120 days if total income other than foreign-source income exceeds Rs 15 lakh in the year (still combined with 365 days in the four preceding years).

An Indian citizen is deemed resident (Act 2025 s.6(7); Act 1961 s.6(1A)) if total income other than foreign-source income exceeds Rs 15 lakh and the person is not liable to tax in any other country by reason of domicile, residence or similar criteria; days in India do not matter for this rule.

A resident individual is 'not ordinarily resident' (NOR) if non-resident in nine of the ten preceding tax years, or in India 729 days or less in the preceding seven; a citizen or person of Indian origin with Indian income above Rs 15 lakh who is in India 120 days or more but under 182 days in the tax year is also NOR, as is a citizen deemed resident under s.6(7).

A non-resident's total income in India includes only income received or deemed received in India, or accruing or arising (or deemed to) in India; a resident (not NOR) is taxed on income from whatever source, and an NOR on foreign-accruing income only if from a business controlled in or profession set up in India.

A person other than a company or firm must file a return for a tax year if total income (before specified deductions) exceeds the maximum amount not chargeable to tax; a resident other than NOR who holds foreign assets or has signing authority abroad must file regardless of income (Act 2025 s.263).

A non-resident Indian need not file a return if total income is only investment income and/or long-term capital gains from foreign exchange assets (specified Indian assets bought with convertible foreign exchange), and tax deductible at source has been deducted (Act 2025 s.216, carrying forward old s.115G).

India and the UAE have a comprehensive double taxation agreement, in force in India by notification from 1993, amended by later notifications (2007, 2013); the UAE Ministry of Finance list shows the original agreement and protocols dated 2007 and 2012.

The Indian agreement covers taxes on income and on capital and applies to persons resident in one or both states.

Where India has a tax treaty with a country, the Income-tax Act applies to a person covered by it only to the extent more beneficial to that person.

Under Article 4 of the India-UAE DTAA, a UAE individual is a 'resident' if present in the UAE at least 183 days in the calendar year; an Indian resident is a person liable to tax in India by reason of domicile, residence or similar criterion, excluding persons taxed only on India-source income.

Where an individual is resident of both countries, the India-UAE treaty's tie-breaker rule decides in order: permanent home; if in both, closer personal and economic relations (centre of vital interests); then habitual abode; then nationality; then mutual agreement of the competent authorities.

Article 14 (independent personal services) of the India-UAE DTAA: professional services income of a resident is taxable only in the residence State, unless there is a fixed base in the other State or a stay there of 183 days or more in the relevant year.

To claim treaty relief, a non-resident must obtain a certificate of being resident in the other country from that country's government (a Tax Residency Certificate) and furnish prescribed documents.

Form 10F is now Form 41 under the Income-tax Rules, 2026 (rule 75; Act 2025 s.159(8)), an electronic self-declaration for non-residents claiming DTAA benefit. The department's double-taxation page still uses the name Form 10F.

Form 41 needs the foreign Tax Residency Certificate (valid for the relevant financial year in India) and the foreign tax identification number; it is filed once per tax year, and without it the DTAA benefit is not available and the Indian payer must deduct TDS at the applicable rate.