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>\n	He is in India for 182 days or more during the relevant previous year OR<\/strong><\/td>\n<\/tr>\n
2<\/strong><\/td>\n	He 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>\n He 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>\n His 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 \n \u00a0 \u00a0 \u00a0 \u00a0Residential status is always determined for the Financial Year (From 1st April to 31st \nMarch)<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0Residential status of the person is required to be determined in respect of each financial \nyear.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0A person is said to be of Indian Origin if he or either of his parents or any of his grandparents was born in undivided India<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0To calculate the number of days stay in India, both the Day of Arrival into India and the Day of Departure from India are counted as the days of stay in India.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0Dates stamped on Passport are normally considered as proof of dates of departure from and arrival in India.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0Presence in territorial waters in India would also be known as stay in India.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0It is not necessary that the stay should be at one place.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0It is not necessary that stay should be for continuous period.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0Official tours abroad in connection with employment in India shall not be regarded as employment outside India.<\/li>\n \u00a0 \u00a0 \u00a0 \u00a0A person may be resident of more than one country for any Previous Year.<\/li>\n<\/ul>\n Citizenship of a country and residential status of that country are two separate concepts. A person may be an Indian national \/ Citizen but may not be a resident in India and similarly any person may be Foreign National \/ Citizen but may be resident in India.<\/p>\n The following Flow Chart help you to understand the concept in short time<\/strong><\/p>\n","protected":false},"excerpt":{"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 … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4],"tags":[139],"class_list":["post-1459","post","type-post","status-publish","format-standard","hentry","category-income-tax","tag-residential-status"],"yoast_head":"\n