Table of Contents
1. What do you mean by residential status?
The Taxability of any person in India depends upon the residential status in India for any particular financial year.
2. How is the residential status of individuals decided?
The Residential Status of an Individual is determined on the basis of period of stay in India and it is computed separately for every year.
3. Who is a resident?
If an individual satisfies any one of the below mentioned basic conditions, he is said to be a Resident of India in respect of such financial year.
4. What are the basic conditions to determine the residential status of an individual?
The individual should have,
- Stayed in India for a period of 182 daysor more in the relevant previous year,OR
- Stayed in India for a period of 60 daysor more in the relevant previous year AND also stayed in India for a period of 365 days or more during 4 years immediately preceding the relevant financial year (PY).
5. What are the exceptions to the basic conditions to determine the residential status of an individual?
In order to determine the residential status for the below mentioned individuals, only the first basic condition as mentioned above is applicable. (I.e. the residential status of the below mentioned individuals will be decided based upon their stay in India for a period of 182 days or more)
- Individual being a citizen of India, who leaves India during the previous year as a Crew member of an Indian ship.
- Individual being a citizen of India, who leaves India during the previous year for the purposes of employment outside India.
- Individual being a citizen of India, or a person of Indian origin, who comes on a visit to India during the previous year.
6. Who is a person of Indian origin?
Person of Indian origin – A person is considered to be a person of Indian origin if either his parents or grandparents were born in undivided India.
7. What is the special residential status condition applicable to Indian citizen (or) person of Indian origin visiting India?
In case of Indian citizen (or) person of Indian origin who comes to India for visit has Income from Indian sources (other than income earned outside India) exceeds 15 Lakhs in PY shall also become Resident but not ordinary resident if,
He stays in India for at least 120 days during relevant PY and 365 days or more during the 4 preceding previous years (w.e.f 1.04.2021)
8. Who is a Deemed Resident?
An Individual, being a citizen of India, whose total income, other than income from foreign sources, exceeds Rs.15 lakhs during the previous year and if he is not liable to pay tax in any other country, he shall be deemed to be resident in India for that previous year. (w.e.f. 1-4-2021).
9. What is the difference between Resident and Ordinary resident & Resident but not- Ordinarily Resident?
Further, a Resident Individual is classified as Resident and Ordinary resident (ROR) and Resident but not-Ordinarily Resident (RNOR) on the basis of additional conditions given below.
- Resident individual has to be a resident of India in at least 2 years out of 10 years immediately preceding the previous year.
- Resident individual has stayed in India for 730 days or more during 7 years immediately preceding the previous year.
If a person satisfies both the above additional conditions, he is considered as a Resident and Ordinary resident (ROR)
If a person does not satisfy any one or none of the above additional conditions, he is considered as a Resident but not-Ordinary resident (RNOR)
10. Who is a Non-Resident ?
An individual who does not satisfy any of the basic conditions mentioned above would be a Non-resident for the relevant previous year.