How Digital Nomad Visas Affect Indian Tax Residency and NRI Status

A digital nomad visa allows a person to live in a foreign country while working remotely. However, obtaining such a visa does not automatically make an Indian citizen a Non-Resident Indian for tax purposes.

India determines your residential status primarily from your physical presence, travel history and certain special rules applicable to Indian citizens. The country issuing the digital nomad visa will apply its own tax-residency rules.

As a result, you may hold a valid foreign visa but remain an Indian tax resident. In some cases, you may even become a tax resident of both countries during the same year.

This guide explains how a digital nomad visa can affect your Indian tax residency, foreign income and NRI status.

Does a Digital Nomad Visa Change Your Indian Tax Residency?

A digital nomad visa does not directly determine your Indian residential status.

It normally gives you legal permission to live in another country while working remotely for:

• A foreign employer
• An Indian employer
• Overseas clients
• Indian clients
• Your own foreign or Indian business

Your Indian residential status is determined separately under Indian income-tax law. The Income Tax Department does not simply ask whether you hold a foreign visa. It examines your days in India, previous travel history, citizenship, income and other applicable conditions.

For Tax Year 2026–27 onward, residential status is determined under the Income-tax Act, 2025. The Income Tax Department confirms that the fundamental day-count conditions continue under the new law.

Therefore, an Indian citizen can hold a one-year digital nomad visa but remain an Indian tax resident if they continue spending enough time in India.

The reverse is also possible. A person may qualify as a non-resident in India even when the foreign country does not treat the person as its tax resident.

How India Determines a Digital Nomad’s Residential Status

For each Indian tax year beginning on or after 1 April 2026, your status must be determined independently under the Income-tax Act, 2025.

An individual will generally qualify as an Indian resident if either of these conditions is met:

1. The individual stays in India for at least 182 days during the relevant tax year; or
2. The individual stays in India for at least 60 days during that tax year and at least 365 days during the four preceding tax years.

Special modifications apply to certain Indian citizens and Persons of Indian Origin.

The 182-day test

The first test is relatively straightforward. If you spend 182 days or more in India during the tax year, you will generally qualify as an Indian resident.

A digital nomad visa does not override this rule.

For example, Aarav obtains a digital nomad visa in July 2026 but spends 190 days in India during Tax Year 2026–27. Despite holding the foreign visa, he will generally be an Indian resident because he crosses the 182-day threshold.

Digital nomads should count every day or part of a day carefully, using passport records, flight tickets and immigration history.

The 60-day and 365-day test

A person may become an Indian resident even without spending 182 days in India.

The second test can apply when the person:

• spends at least 60 days in India during the relevant tax year; and
• spent at least 365 days in India during the preceding four tax years.

This condition is particularly relevant to new digital nomads who previously lived in India. Their past Indian presence may cause them to become resident even when their current-year stay is significantly below 182 days.

However, the 60-day requirement is modified for certain Indian citizens leaving India for employment abroad and certain Indian citizens or Persons of Indian Origin visiting India.

Special rule for Indian citizens leaving India for employment

When an Indian citizen leaves India during a tax year for employment outside India, the usual 60-day condition is generally replaced with 182 days.

This can help someone who moves abroad for a qualifying overseas job avoid becoming an Indian resident under the 60-day-plus-365-day test.

However, digital nomads should not automatically assume that this exception applies to them.

A salaried employee leaving India to take up employment abroad may have a stronger position than:

• a self-employed consultant;
• a freelancer moving between countries;
• a founder operating their own business;
• someone travelling abroad without a confirmed overseas employment arrangement; or
• an employee formally based in India who temporarily works from overseas.

Whether the person left India “for the purpose of employment outside India” depends on the actual working arrangement and supporting documents, not merely the name of the visa.

When Do the 120-Day and Deemed-Residency Rules Apply?

Indian digital nomads should not assume that staying below 182 days always guarantees non-resident status.

The 120-day rule

A special rule may apply to an Indian citizen or Person of Indian Origin who visits India and has total income exceeding ₹15 lakh, excluding income from foreign sources.

In such a case, the usual 60-day threshold can be replaced with 120 days, along with the requirement of spending at least 365 days in India during the preceding four years.

A qualifying visitor staying in India for 120 to 181 days may become an Indian resident. Such a person is generally classified as Resident but Not Ordinarily Resident, subject to the applicable conditions.

The ₹15 lakh test does not refer to worldwide income. It considers total income other than income from foreign sources under the applicable statutory definition.

The rule is also aimed at a person “visiting” India. A digital nomad who has effectively returned to live or work in India should not automatically apply the visitor concession without reviewing the facts.

Deemed residency

A separate deemed-residency rule applies to certain Indian citizens who:

• have total income exceeding ₹15 lakh, excluding income from foreign sources; and
• are not liable to tax in any other country or territory because of domicile, residence or another similar criterion.

For Tax Year 2026–27 onward, the corresponding provision appears in Section 6(7) of the Income-tax Act, 2025.

This provision can be relevant to digital nomads who continuously move between countries without becoming liable to tax as a resident anywhere.

However, living in a country with no personal income tax does not automatically prove that you are “not liable to tax” there. Being liable to tax and actually paying tax are different concepts. The foreign country’s law, visa conditions and tax-residency rules must be examined.

A deemed resident is generally treated as RNOR rather than ROR, subject to the applicable law.

Can a Digital Nomad Be Tax Resident in Two Countries?

Yes. A person may qualify as a tax resident of India and another country during the same period.

For example, Meera spends 185 days in India during Tax Year 2026–27. She also satisfies the calendar-year residence test of the country issuing her digital nomad visa.

India may treat her as resident because of her physical presence, while the other country may also treat her as resident under its domestic law.

This is called dual tax residency.

If India has a Double Taxation Avoidance Agreement with the other country, the treaty may contain tie-breaker rules. Depending on the treaty, these can consider factors such as:

• availability of a permanent home;
• centre of vital interests;
• habitual abode;
• nationality; and
• agreement between the tax authorities.

Treaty residency does not erase domestic filing obligations automatically. A person may need to file returns in one or both countries and claim treaty relief using the prescribed documents.

A Tax Residency Certificate from the foreign country may be necessary when claiming treaty benefits in India. However, the certificate supports the treaty claim; it does not replace the initial domestic-law residency calculation.

How Does Residential Status Affect a Digital Nomad’s Indian Tax?

Your Indian residential status affects the scope of income India can tax.

Non-Resident

A non-resident is generally taxed in India on income that:

• accrues or arises in India;
• is deemed to accrue or arise in India;
• is received in India; or
• is deemed to be received in India.

An NRI digital nomad can therefore remain taxable in India on Indian rent, taxable bank interest, capital gains, consulting income sourced to India and other qualifying Indian income.

Transferring previously earned overseas money to India does not by itself make it taxable. However, the place of first receipt and the underlying source of income should be reviewed.

Resident but Not Ordinarily Resident

RNOR is a separate residential classification with specific statutory conditions.

Foreign-source income is generally outside the Indian tax scope for an RNOR unless it is derived from a business controlled in India or a profession set up in India, subject to the applicable law.

This distinction matters for freelancers and business owners. A digital nomad may physically perform work overseas but continue operating a business controlled from India. The income cannot be classified solely by looking at the bank account receiving the payment.

Resident and Ordinarily Resident

An ROR is generally taxable in India on worldwide income.

This can include:

• Foreign salary
• Freelance or consulting income
• Overseas business income
• Foreign interest and dividends
• Capital gains on overseas investments
• Foreign rental income

Foreign assets and accounts may also trigger disclosure requirements in the applicable Indian income-tax return.

Where the same income is taxed abroad, the individual may be able to claim treaty relief or a foreign tax credit, subject to the applicable DTAA and Indian compliance requirements.

Indian Tax Checklist Before Using a Digital Nomad Visa

Before relying on a digital nomad visa for tax planning, complete the following checks:

1. Calculate your India stay: Count the days spent in India for the current tax year and the preceding relevant years.
2. Identify why you left India: Determine whether you genuinely left for employment outside India or as a freelancer, business owner or independent traveller.
3. Check your Indian income: Calculate income other than foreign-source income for the ₹15 lakh tests.
4. Review the foreign country’s rules: Confirm whether the visa makes you eligible or liable to become tax resident there.
5. Check deemed residency: Determine whether you are liable to tax as a resident in any other country.
6. Identify the source of remote income: Consider where services are performed, where the employer or client is located and whether a business is controlled from India.
7. Review the applicable DTAA: Confirm whether India has a tax treaty with the foreign country and whether it contains residency tie-breaker provisions.
8. Maintain documentation: Preserve visas, employment contracts, client agreements, invoices, tax certificates, travel history and bank records.
9. Review FEMA separately: Income-tax residency and FEMA residency use different tests. A foreign visa does not automatically settle your Indian banking status.
10. Plan before crossing a threshold: Review your residential status before additional travel days cause you to meet a different statutory condition for the tax year.

Conclusion

A digital nomad visa can change where you live and work, but it does not automatically change your Indian tax residency or make you an NRI.

Your Indian status must be calculated using your physical presence, prior India stays, citizenship, purpose of departure and applicable income conditions. You must also determine whether the foreign country treats you as a tax resident and whether dual residency or deemed residency arises.

This review should be completed before choosing a destination or planning visits to India. A few additional days in India—or, in some cases, the absence of tax residency abroad—can materially affect your Indian residential status and how India taxes your income and requires reporting of foreign assets.

Savetaxs can help digital nomads calculate their Indian residential status, evaluate the 120-day and deemed-residency provisions, review foreign income and determine whether a DTAA tie-breaker applies. Our cross-border tax professionals can also assist with Indian return filing, foreign tax credits and residency documentation so your remote-work arrangement remains compliant in India and abroad.