Tax residency for Indian citizen (employed overseas), visited India for 130 days with NRE interest

@ Moby Mogli

NRE interest is not considered as Indian Income.

Only NRO interest is considered as Indian Income.

Also, check other factors, previous years how many days you spent in India to be certain about your tax residency status in the applicable FY [you did not mention which one].

Employed overseas for 14 years ,

visited India during 2020 (90 days), 2021 (320 days due to Medical and personal ), 2022 (122 days), 2023 (171 days india), previous stay in india around 30-40 days per year .

all visits are personal .

only source of income is overseas employment salary .

only source of income in India is NRE interest about 20 lacs . But confirming if this is counted as Indian income as it's exempt as per Secrion 10 

@ Mobi Mogli

Google your query for the last FY Residential status. 

Cleartax site had some good information.

Thank you . I checked Cleartax and it talks about only income accrued or received in india but didn't rule out NRE interest on 15 lacs treshhold test for residency check ..

can you share me the related Cleartax link which confirms NRE interest isn't considered as income earned in India ?

I had to rely on 10(4)(ii) that it's exempt from total income . 

@ Mobi Mogli

Refer to the following :-

https://cleartax.in/s/nre-nro-accounts 

Residential status in India for FY 2025-26 depends on how many days you stayed in India during the year, and in some cases, your stay over the previous 4 years as well.

The basic test for Non-Resident (NRI) status:
- Stayed less than 182 days in India in FY 2025-26: NRI
- But there is a second test: if you stayed 60 or more days in FY 2025-26 AND 365 or more days across the previous 4 years, you become Resident (RNOR or ROR)

Exception for Indian citizens working abroad:
If you are an Indian citizen employed outside India, the 60-day threshold in the second test is raised to 182 days. This means for most people working abroad, the simple 182-day rule applies, and below 182 days in India = NRI for that year.

What NRI status means for taxes:
- Only income accruing or received in India is taxable in India
- NRE interest is fully exempt; NRO interest is taxable and subject to 30% TDS
- Foreign salary is not taxable in India while you are NRI

For DTAA relief on income taxable in both countries (India and your country of residence), you need a Tax Residency Certificate (TRC) from the foreign country and Form 10F filed in India.

This [NRI tax guide covering residential status, DTAA, and ITR requirements](https://taxgarden.in/blog/nri-capital-gains-tax-property-shares-tds-itr-india-guide) has the residential status flowchart and key compliance steps.

Section 6 uses “total income, other than income from foreign sources” for the ₹15 lakh test. It does not say “taxable income” or “income chargeable to tax.” NRE interest is not automatically excluded from this test merely because it is exempt under section 10(4)(ii) when the individual is a non-resident under FEMA. The section 10 exemption concerns taxability; it does not, by itself, remove income from the section 6 residence test.

On the facts stated, however, the 120-day rule applies only if the Indian citizen or person of Indian origin visits India and has the specified income above ₹15 lakh. A person employed full-time in Singapore may be within that visiting-citizen provision, but the employment and visit conditions should be verified. If the ₹20 lakh NRE interest is treated as income other than income from foreign sources for this test, the threshold is exceeded; a 130-day stay could then make the individual resident under section 6(1), but not ordinarily resident (RNOR) under section 6(6), assuming the other RNOR conditions are met. FEMA non-resident status does not determine income-tax residence.

• Confirm whether the interest is in fact NRE-account interest qualifying for section 10(4)(ii), and whether the account’s underlying funds and account status satisfy the exemption conditions.
• Check the full year’s income and the two preceding-year stay/residence history. RNOR status is determined separately; it is not established solely by crossing 120 days.
• If treated as resident, the section 10 exemption and the scope of income taxable in India should be examined separately from the section 6 threshold calculation.

This distinction matters when reconciling travel records, bank interest and the return’s residential-status selection. Manual residency checks across stay-day rules, income categories and prior-year history are difficult; automation can reduce repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a smoother compliance workflow, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1