RESIDENTIAL STATUS

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categories of person – resident and non-resident

  • An individual is said to be resident of India if he satisfies at least one of the following to basic condition [sec 6 (1)]:
  1. He is India for 182 days or more during the previous year.
  2. He is in India for 60 days or more during the previous year and 365 days or more during last four years immediately proceeding the relevant previous year.
  • If an individual fails to satisfy both the basic conditions, then he is said to be non-resident in India. (date of arrival and day of departure of the individual is considered as he/she is in India)
  • NOTE: a person can be resident in two countries in the same financial year. Taxation for the above will not lead to double taxation. Residential status and citizenship are two different concepts.

EXCEPTIONS TO BASIC CONDITIONS: in the following two exceptional cases, period of 60 days given in basic condition has been extended to 182 days i.e. in the following exceptional case; an individual is resident in India only if he is in India for at least 182 days during the previous year.

  1. An Indian citizen leaves India during the previous year for purpose of employment outside India.
  2. An Indian citizen or person of Indian origin comes on a visit to India during previous.
    • An individual is said to be a person of Indian origin, if either he or his parents or any of his grandparents born in undivided India(on or before 14th august, 1947 in India)
    • ADDITIONAL CONDITIONS [SEC 6 (6)] – a resident individual is treated as resident or ordinarily resident in India if he satisfies both the additional conditions given below:
  1. He should be resident in India in at least 2 years out of 10 years immediately preceding the relevant previous year.
  2. He should be present in India for 730 days or more during 7 years immediately preceding relevant previous year.
  • If resident individual fails to satisfy any one or both additional as resident but not ordinarily resident.
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