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September 16, 2026
Residential Status of LLP Designated Partner: LLP Act vs Tax Residency
Introduction
The Residential Status of LLP Designated Partner matters when a designated partner spends substantial time outside India. The LLP Act residency requirement and an individual’s income-tax residential status are separate legal tests applied for different purposes. Satisfying one test does not determine the outcome under the other.
For FY 2025–26, tax residency is governed by the Income-tax Act, 1961. From 1 April 2026, the Income-tax Act, 2025 applies. Therefore, the Residential Status of LLP Designated Partner and individual tax residency must be examined separately.
Quick Insights
- The current LLP resident designated partner test is 120 days during the financial year.
- The earlier LLP rule referred to 182 days during the immediately preceding one year.
- FY 2025–26 tax residency is governed by the Income-tax Act, 1961.
- The Income-tax Act, 2025 applies from 1 April 2026.
- A person may be resident for LLP purposes but have a different income-tax status.
What Is the Residential Status of LLP Designated Partner?
Section 7 of the LLP Act, 2008 requires every LLP to have at least two designated partners who are individuals, with at least one being resident in India. A person is resident in India for this purpose if the person has stayed in India for not less than 120 days during the financial year.
Accordingly, the Residential Status of LLP Designated Partner is an LLP-compliance test and does not automatically determine the partner’s tax residency.
LLPs dealing with their yearly ROC requirements can also review Ebizfiling’s LLP Annual Filing service for Form 8 and Form 11 compliance.
What Is the 120-Day Rule for an LLP Designated Partner?
The Residential Status of LLP Designated Partner should be checked using actual physical presence in India during the financial year.
Before the 2021 amendment, Section 7 referred to a stay of at least 182 days during the immediately preceding one year. The Limited Liability Partnership (Amendment) Act, 2021 replaced this with the current 120-day financial-year test, effective from 1 April 2022.
An important practical issue is that the MCA Form 11 instruction kit available online still carries the older wording referring to 182 days during the immediately preceding one year. However, amended Section 7 of the LLP Act prescribes 120 days. Therefore, the statutory provision should be relied upon while determining the Residential Status of LLP Designated Partner. Current MCA portal instructions should also be checked before filing.
For annual return compliance, LLPs can review Ebizfiling’s Form 11 Filing service.
How Should the Stay in India Be Calculated for FY 2025–26?
Consider a partner who left India for Paris on 10 August 2025 and returned on 16 February 2026, then left for Singapore on 28 February 2026 and remained abroad through 31 March 2026.
The exact number of days should be determined from the individual’s actual entry and exit records. Depending on the applicable counting approach and the facts reflected in passport or immigration records, arrival and departure dates may affect the total stay calculation. Therefore, the travel records should be reviewed rather than relying only on an assumed day-count method.
Section 7 of the LLP Act does not prescribe a detailed method for counting part-days or travel days. Passport and immigration records should therefore be reviewed carefully. On the facts used in this illustration, the stay remains above the 120-day LLP threshold under either calculation discussed above.
Does a Stay Exceeding 120 Days Satisfy the LLP Resident Requirement?
Yes. Based on the stated facts, the stay exceeds the 120-day requirement under Section 7 of the LLP Act. Accordingly, the individual satisfies the resident designated partner requirement for LLP compliance purposes.
This conclusion establishes LLP compliance only; it does not automatically establish tax residency.
For the broader ROC compliance framework, businesses can also refer to Ebizfiling’s Annual Filing of LLP in India guide.
How Is Tax Residency Determined Under the Income-tax Act, 1961?
For FY 2025–26 / AY 2026–27, residential status is determined under Section 6 of the Income-tax Act, 1961.
Under the basic conditions, an individual is resident if present in India for:
- 182 days or more during the relevant previous year; or
- 60 days or more during that year and 365 days or more during the four preceding previous years.
Special rules apply to specified Indian citizens leaving India for employment abroad or as crew members, and to Indian citizens or Persons of Indian Origin visiting India. Certain visitors with income exceeding ₹15 lakh and specified Indian citizens covered by deemed-residency provisions require separate analysis.
This tax test is separate from the Residential Status of LLP Designated Partner.
For further reading on the individual residency framework, see Ebizfiling’s guide on residential status for Income Tax purposes.
Can Tax Residency Be Determined Only From the LLP Stay Calculation?
No. The LLP Act’s 120-day requirement should not be used to determine an individual’s income-tax residential status.
Although the ordinary 182-day test is not met, the alternative 60-day plus 365-day condition may still apply. Citizenship, PIO status, purpose of leaving or visiting India, Indian income and deemed-residency rules can also affect the result.
Therefore, the Residential Status of LLP Designated Partner may be resident for LLP purposes while tax residency still requires a complete Section 6 analysis.
What Changes Under the Income-tax Act, 2025?
The Income-tax Act, 2025 applies to tax years beginning on or after 1 April 2026. Tax years beginning before that date continue to be governed by the Income-tax Act, 1961. The applicability of the law therefore depends on the tax year for which residential status is being determined.
Under Section 6 of the new Act, an individual continues to be resident if present in India for:
- 182 days or more during the tax year; or
- 60 days or more during that tax year and 365 days or more during the preceding four years.
These conditions continue to operate subject to the applicable special rules for specified Indian citizens, Persons of Indian Origin, visiting individuals and deemed-residency cases.
The provisions relating to specified Indian citizens, PIO visitors, the ₹15 lakh threshold and deemed residency also continue under the new law. The LLP Act resident designated partner test remains completely separate from the individual tax-residency test under the Income-tax Act, 2025.
Which Income-tax Law Applies to FY 2025–26 and FY 2026–27?
For FY 2025–26 / AY 2026–27, residential status continues to be determined under the Income-tax Act, 1961. The Income-tax Act, 2025 does not apply merely because an assessment or reassessment relating to that year takes place after 1 April 2026.
For the tax year beginning on 1 April 2026, the Income-tax Act, 2025 applies.
Individuals filing for FY 2025–26 should therefore follow the old-law framework while completing their Income Tax Return Filing.
What Is the Difference Between LLP Residency and Tax Residency?
The Residential Status of LLP Designated Partner serves an LLP-compliance purpose and uses the current 120-day threshold.
Income-tax residency determines the scope of an individual’s taxable income and uses the 182-day test or alternative Section 6 conditions, subject to special rules.
The individual’s income-tax status must be determined separately as Resident and Ordinarily Resident (ROR), Resident but Not Ordinarily Resident (RNOR), Non-Resident, or under any applicable deemed-residency provision. The outcome of the LLP Act test has no role in deciding that tax classification.
The LLP resident designated partner test and the individual income-tax residency test should therefore always be examined independently.
What Documents Support the Residential Status of LLP Designated Partner?
Maintain passport entry and exit stamps, immigration records, flight tickets, boarding passes, visa documents and previous years’ travel history. These records support both tax-residency analysis and the Residential Status of LLP Designated Partner.
Businesses should avoid using the old 182-day LLP rule, assuming that a stay below 182 days automatically means tax non-residency, ignoring the preceding four-year test, or applying the Income-tax Act, 2025 retrospectively to FY 2025–26.
Confused Between LLP Residency and Tax Residency? Let Ebizfiling Help
Determining the Residential Status of LLP Designated Partner can become complicated when international travel, LLP compliance and income-tax residency overlap. A partner may satisfy the LLP Act’s residency requirement while having a completely different status under income-tax law, making accurate interpretation essential.
Ebizfiling can assist with LLP Annual Filing, Form 11 compliance, residency-related review and cross-border tax matters. For cases involving overseas travel or uncertainty around individual tax residency, our Tax Consultancy Services can help evaluate the applicable provisions and ensure that LLP residency and personal tax residency are assessed correctly and independently.
Need clarity on your LLP partner’s residential status? Connect with Ebizfiling experts for professional guidance and compliant filing support.
Conclusion
The Residential Status of LLP Designated Partner is determined under Section 7 of the LLP Act using the applicable 120-day financial-year requirement. Travel days should be determined from reliable entry and exit records rather than treated as an absolute calculation. On the facts used in this illustration, the stay remains above the LLP threshold.
Individual tax residency is a separate determination. FY 2025–26 is governed by the Income-tax Act, 1961, while the Income-tax Act, 2025 applies to tax years beginning on or after 1 April 2026. The LLP resident designated partner test and the individual tax-residency test must therefore be applied independently.
Frequently Asked Questions
1. Can a body corporate become a designated partner in an LLP?
No. A designated partner must be an individual. However, where an LLP has one or more body corporates as partners, individual nominees of those body corporates may act as designated partners. Section 7 of the LLP Act specifically provides for such nominee arrangements.
2. Can the nominee of a body corporate satisfy the resident designated partner requirement?
Yes. An individual nominee of a body corporate can satisfy the resident designated partner requirement if that individual independently meets the applicable conditions under Section 7 of the LLP Act. The residency test therefore applies to the individual nominee and not to the body corporate that nominated the person.
3. What should an LLP do if its resident designated partner resigns?
The LLP should appoint an eligible replacement as soon as possible and complete the required MCA filing. Where a designated partner position becomes vacant, the LLP Act generally allows up to 30 days to fill the vacancy. The LLP should also ensure that the resident designated partner requirement remains complied with.
4. What is the penalty for not having the required resident designated partner?
Failure to comply with the designated partner requirements can attract monetary penalties on the LLP and its partners. Continuing non-compliance may also result in an additional daily penalty, subject to the limits prescribed under the LLP Act.
5. Is Form 4 required when a designated partner is appointed or ceases to hold office?
Yes. LLP Form 4 is used to intimate the Registrar about the appointment or cessation of a partner or designated partner and specified changes in their particulars. The MCA Form 4 instruction kit requires the notice to be filed within 30 days of the relevant event.
6. What happens if an LLP is left with only one designated partner?
An LLP is required to maintain the prescribed number of designated partners. If the number falls below the required level, the LLP should regularise the position promptly in accordance with the LLP Act. Any applicable deeming provision during the vacancy does not remove the separate resident designated partner requirement.
7. Is prior consent required before appointing an individual as a designated partner?
Yes. An individual cannot become a designated partner unless they have given prior consent to act as such in the prescribed manner. The LLP must also file the prescribed particulars of the individual with the Registrar within 30 days of appointment.
8. Is DPIN mandatory for every designated partner of an LLP?
Yes. Section 7 requires every designated partner to obtain a Designated Partner Identification Number (DPIN) from the Central Government. The identification requirement applies irrespective of whether the designated partner is the LLP’s resident designated partner or another designated partner.
9. Can Ebizfiling assist when an LLP needs to add or remove a designated partner?
Yes. Ebizfiling can assist with the documentation and MCA filings involved in the addition or removal of an LLP partner or designated partner, including relevant Form 3 and Form 4 compliance and updates to the LLP Agreement where applicable.
10. Can Ebizfiling review partner-related filings before LLP annual compliance is completed?
Yes. Ebizfiling can assist in reviewing partner details and relevant LLP compliance before annual filings such as Form 11 and Form 8 are completed. Where an appointment, cessation or other partner-related change requires a separate event-based filing, addressing that compliance helps keep the LLP’s MCA records aligned with its current structure.
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