{"id":1459,"date":"2015-01-18T00:00:00","date_gmt":"2015-01-17T18:30:00","guid":{"rendered":""},"modified":"2016-09-02T03:05:13","modified_gmt":"2016-09-01T21:35:13","slug":"how-to-determine-the-residential-status-of-individual-under-income-tax-act-1961","status":"publish","type":"post","link":"https:\/\/taxclick.org\/type\/income-tax\/how-to-determine-the-residential-status-of-individual-under-income-tax-act-1961\/","title":{"rendered":"How to determine the residential status of individual under Income Tax Act 1961?"},"content":{"rendered":"

Levy of Income Tax of an assessee depends on his residential status as per Indian Income-tax Act, 1961. In the case of Indian citizen, whether an income earn by a person outside India, is taxable in India depends upon the residential status of the person in India. Similarly, whether an income earned by a foreign national in India (or outside India) is taxable in India depends on the residential status of the individual and not on his citizenship. Therefore, determining the residential status of a person is very significant in order to find out person’s tax liability.<\/p>\n

Residency Test of the Individual<\/strong><\/p>\n

The Person\u2019s status as a resident or non-resident depends on his period of stay in India. The period of stay is counted in number of days for each financial year beginning from 1st April and ending on 31st March.<\/p>\n

If an
\nindividual who satisfies ANY ONE<\/strong> of
\nthe conditions out of the two, then he becomes a Resident.<\/p>\n\n\n\n\n\n
Condition
\nNo.<\/strong><\/td>\n		Condition<\/strong><\/td>\n<\/tr>\n
1<\/strong><\/td>\nHe is in India for 182 days or more during the relevant previous year OR<\/strong><\/td>\n<\/tr>\n
2<\/strong><\/td>\nHe is in India for *60 days or more during the previous year and he is in India for 365 days or more during the 4 years prior to the previous year.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/strong>* The period of 60 days is considered as 182 days for\u00a0\u00a0Indian citizen or person of Indian Origin<\/p>\n

If an Individual is failed to satisfy both the conditions, then he will be non-resident.<\/p>\n

Once we find the person becomes the resident in India, as per conditions mentioned above, and then we have to check whether the person is Ordinary Resident or Resident but not Ordinary Resident.<\/strong><\/p>\n

\u00a0To become ordinary resident of India the person required to satisfy BOTH the conditions given below:<\/strong><\/p>\n\n\n\n\n\n
Condition
\nNo.<\/strong><\/td>\n		Condition<\/strong><\/td>\n<\/tr>\n
1<\/strong><\/td>\nHe is a resident, as per the above provisions, for at least 2 out of 10 previous years prior to the previous year under consideration AND<\/strong><\/td>\n<\/tr>\n
2<\/strong><\/td>\nHis stay in India during the 7 previous years prior to the previous year under consideration is\u00a0730 days or more<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/strong>\u00a0<\/strong>Some of important points to note<\/strong><\/p>\n