FEMA decides which accounts you may hold and what you may buy. The Income-tax Act decides what India taxes. They use different tests, and the answers often differ in the same year.
Section 6 of the Income-tax Act starts with 182 days in India during the year, or 60 days in the year together with 365 days across the preceding four. For an Indian citizen leaving India for employment, that 60-day limb is relaxed to 182 days. For an Indian citizen or person of Indian origin visiting India whose Indian income exceeds ₹15 lakh, it tightens to 120 days. There is also deemed residency: an Indian citizen with Indian income above ₹15 lakh who is not liable to tax in any other country is treated as resident, but not ordinarily resident.
Where India and your country of residence both tax the same income, the double taxation avoidance agreement decides who gets to. To claim it you need a Tax Residency Certificate from your country of residence, and Form 10F filed electronically on the Indian income tax portal.
Which test applies is not always the one you expect. A PPF account, for instance, is governed by the income-tax definition of a non-resident rather than the FEMA one — so your bank and your PPF can disagree about you for months, and both be right.
PPF accounts after becoming a non-resident
Which rate applies depends on where you are resident, and the treaties differ. If you are weighing a move, the two sets of caps can be put side by side.
Moving countries? Compare India's DTAA with each
- "Not ordinarily resident" is a real and useful middle status for returning NRIs.
- Indian income is taxable here whether or not you are resident.
- The TRC has to be for the relevant period, not the date you happen to apply.
Source: the residence tests and the "not ordinarily resident" status are in the Income-tax Act. The Income-tax Act, 2025 replaces the 1961 Act with effect from 1 April 2026 and renumbers it throughout, so check the section numbering in the new Act before quoting one — including the provision that makes a tax residency certificate a condition of claiming treaty relief. Your FEMA status is a separate question, in section 2(v) of FEMA, 1999. Checked 20 September 2026.