Income Tax Act


How is the residential status determined under the Income Tax Act

As in most of the countries , the liability under the Indian income tax law is also co-related to the residential status of the concerned tax payer. Section 6 of the India income-tax status creates 3 categories as far as residential status is concerned.

Resident : An Individual is said to be resident in India in any previous year if he is in India for atleast 182 days in that year or during that year he is in India for a period of atleast 60 days & has been in India for atleast365 days during the 4 years preceding that year. However, the period of 60 days referred to above is increased to 182 days in case of Indian citizens who leave India as members of the crew of an India Ship of for India citizens or persons of Indian origin who, being outside India, come to visit India in any previous year.

Non- Resident : A person who is not a resident in terms of the above provision is a non-resident.

Resident but Not Ordinarily Resident (RNOR)

A person who is otherwise resident as defined inpara 10.2.1 would be RNOR if he satisfies any of the following two conditions:

[list](i)he has not been resident in India in 9 out of 10 preceding previous years.

[list](ii)He has not been in India for an aggregate period of 730 days or more in the preceding 7 previous years.
W.e.f. 01.04.2004, the status 'RNOR' has been redefined as follows :-

An individual shall be said to be RNOR if he has been a non-resident in India in 9 out of 10 previous years preceding that year or has been in India for a period amounting to 729 days or less during the 7 previous years preceding that year.



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