'Your NRI status isn’t safe if Indian income crosses...': A CA explains the surprise tax trigger

You may think you're an NRI just because you spend most of the year abroad—but your bank balance in India might say otherwise. CA Nitin Kaushik warns that if your Indian income crosses ₹15 lakh, you could lose your NRI status even if you haven’t stayed in India for long. 

“Your tax status can change much sooner than you think,” he wrote on X, highlighting how this little-known rule can quietly flip your financial obligations overnight.

Kaushik explained the misconception about NRI status: it’s not just about how many days you spend outside India—how much you earn within India matters too.

“Being an NRI (Non-Resident Indian) isn’t just about how many days you spend abroad—it also depends on how much you earn in India,” he wrote. “If your Indian income crosses ₹15 lakh, your tax status can change much sooner than you think.”

He illustrated the rule with an example:

Say Aman, an Indian citizen working overseas, who spent 130 days in India last year. His earnings included:

• Salary credited abroad – ₹30 lakh (Not counted as Indian income)
• Salary credited in an Indian bank – ₹5 lakh (Counted)
• Rental income from Indian property – ₹6 lakh (Counted)
• Interest from Indian fixed deposits – ₹2 lakh (Counted)
• Exempt HRA from Indian salary – ₹1 lakh (Not counted)
• 80C deductions (PPF, ELSS, etc.) – ₹1.5 lakh (Not relevant for threshold)

Total taxable Indian income: ₹13 lakh

Since this is below ₹15 lakh, Aman remains an NRI and the 120-day rule does not apply.

However, had his Indian income touched ₹15 lakh or more, he would be reclassified as an RNOR (Resident but Not Ordinarily Resident).

Kaushik emphasized why this matters: “If you become RNOR or Resident, your global income may become taxable in India.”

He also noted key exclusions:

• Deductions under 80C or 80D do not lower the ₹15 lakh threshold
• Interest from NRE savings and FDs is tax-exempt and excluded from this limit

His advice:

• Monitor all sources of Indian income
• Plan visits carefully if your earnings are close to the threshold
• Consult a tax expert to avoid missteps