Moment guide · FY 2026-27

I am relocating abroad mid-year

Do I pay Indian tax on income earned abroad after relocating?

Sec 6(1)Sec 5Sec 192Sec 9Verified 2026-08-11

Your Indian tax depends on the day count: 182 days or more in India makes you a resident taxable on global income for the year, while below that you are a non-resident taxed only on India-source income after departure. Convert resident bank accounts to NRE/NRO within 6 months of becoming an NRI, and check the DTAA with your new country for relief. The employer should stop Indian TDS once your status changes, and any excess TDS already deducted is recoverable in your return.

Your legitimate options

Every route the statute actually gives you — with its condition, cap and deadline.

Route	Condition	Cap / deadline
Resident for part of the year	In India 182 days or more in the year — taxable on global income for the full year, with foreign tax credit where applicable	Global income taxed in India for the whole FY
Non-resident after departure	Below 182 days — only India-source income is taxable after the date of departure	Foreign salary after departure is outside Indian tax if you are a non-resident
NRE/NRO account conversion	Convert resident accounts to NRE/NRO within 6 months of becoming an NRI (FEMA timeline)	NRE interest is tax-free while NRI; NRO interest is taxable

The #1 trap

Continuing to be treated as a resident by your old employer's payroll — after your day count drops below 182, foreign salary should not attract Indian TDS, and you may be entitled to a refund of TDS already deducted. Also, the 6-month FEMA window for converting resident accounts to NRE/NRO is often missed, leaving interest wrongly taxed or funds stuck.

The decision path

Follow it top to bottom — the first condition that matches is your answer.

IF you are in India 182 days or more in the FY → you are a resident, taxable on worldwide income for the whole year.
IF you are in India fewer than 182 days → you are a non-resident; only India-source income is taxed after departure.
IF your new employer or assignment pays you abroad → confirm whether Indian TDS under section 192 still applies to your status.
IF you hold resident bank accounts → convert them to NRE/NRO within 6 months of becoming an NRI to protect NRE interest.
IF you pay tax abroad → check the DTAA with UAE, Singapore or UK and claim foreign tax credit in the Indian return where due.
IF your departure splits the year → file as resident-and-non-resident parts only where the law allows, otherwise the status governs the full year. [VERDICT: day count first, then accounts, then DTAA.]

Worked example

Aditi, engineer moving from Bengaluru to Dubai in October

Aditi spends 1 January to 30 September in India, which is 273 days, and moves to Dubai on 1 October. Her stay in India for the financial year is 273 days, which is more than 182, so she is a resident for AY 2026-27 and her global income for the full year, including the Dubai salary from October to March, is taxable in India. The 182-day test is counted on the financial year, not on the date of departure, so a mid-year move does not split the year for a person who spent most of it in India. Her Indian employer stops deducting TDS in October and her Dubai employer pays her in AED without Indian withholding, but her return for the year must include both streams. She claims foreign tax credit for any UAE tax paid, using the India-UAE DTAA, and files Form 67 before the ITR due date for the credit to work. Aditi also converts her resident savings account to NRO and opens an NRE account within six months, because FEMA requires the conversion and NRE interest is tax-free while she is non-resident, whereas NRO interest is taxed at slab rates. Her fixed deposits in India continue to earn interest on which the bank deducts TDS at 30% for non-residents in the next year when she becomes a non-resident. For next year her day count in India is expected to be below 182, so only India-source income — NRO interest, any rental income and dividends — will be taxed. Aditi keeps the salary slips from both employers, the Dubai tax residency certificate, and the account conversion records for her return. A quick call with us dials in the final figure. Aditi also asks her old employer to issue the Form 16 for the period worked, and her new Dubai employer to certify her salary in AED with the conversion to INR at the SBI TT buying rate, because both amounts go into the resident-year return. She checks the India-UAE DTAA article on employment income: as a resident of India for the year, her Dubai salary is taxable in India, and the UAE does not levy income tax, so there is no foreign tax credit to claim for 2026-27; from the next year, when she is a non-resident, the Dubai salary is outside the Indian net. A quick call with us dials in the final figure.

Questions people actually ask

How is residency counted for a mid-year move?

The 182-day test applies to the whole financial year. If you are in India 182 days or more, you are a resident for the full year and your global income is taxable, even if you left in October.

Is foreign salary taxable in India after I leave?

Once you become a non-resident (below 182 days in India), only India-source income is taxable. Foreign salary for work performed abroad is outside the Indian tax net, subject to the DTAA.

When should I convert my resident accounts?

FEMA allows conversion of resident accounts to NRE/NRO within 6 months of becoming an NRI. NRE interest stays tax-free; NRO interest is taxable.

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Sections: 6(1), 5, 192, 9 · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).