RESIDENTIAL STATUS OF AN ‘INDIVIDUAL’ - Income Tax - Ready Reckoner - Income Tax

RESIDENTIAL STATUS OF AN INDIVIDUAL An individual may either be: Resident in India; or Deemed to be resident in India; or Non-Resident in India Section 6 Residential Status of an Individual If an Individual Resident in India , we have to further determine he is: Resident and ordinarily resident in India (R-OR) {if he satisfies any 1 of the basic conditions u/s 6(1) and both the additional conditions stipulated u/s 6(6)}, or Resident but not ordinarily resident in India (R-NOR) {if he satisfies any 1 of the basic conditions u/s 6(1) or any 1 of the additional conditions u/s 6(6)}. Further if an individual is deemed to be resident in India as per section 6(1A), he shall be not ordinarily resident (NOR) in India. Section 6(1) determines that an Individual is said to resident in India if he satisfies any one of the following two conditions (Basic Conditions); His stay or total stays during the relevant previous year is amounting in all is 182 days or more; or His stay in India for 60 days or more during the relevant previous year and he has been in India for 365 days or more during 4 previous years immediately preceding the relevant previous year. For these persons, Sec. 6(1)(b) stated above shall not be applicable and only Sec. 6(1)(a) would be applicable: For Indian Citizen going abroad on a Job or as a Member of crew of an Indian ship For Indian Citizens and Persons of Indian Origin (with certain exceptions explained below) Explanations to exceptions for condition stipulated in Section 6(1)(b): - In case of Individual, who is a citizen of India leaves India for the purpose of employment outside India in any previous year, in above condition (b) 60 days shall be substituted by 182 days . In case of Individual, who is citizen of India and person of Indian origin Visits to India in any previous year, in above condition (b) 60 days shall be substituted by 182 days . And, in case of such person having total income, other than income from foreign sources exceeding 15 Lakhs during previous year, in above condition (b) 60 days shall be substituted by 120 days . Section 6(6) determines that an Individual is said to resident and ordinarily resident in India if he satisfies both of the following two conditions (Additional Conditions); He is resident in India in 2 out of the 10 previous years immediately preceding the relevant previous year and, His stays in India for 730 days or more in 7 previous years immediately preceding the relevant previous years Status in case of a member of the crew of a ship Note: (w.e.f. 1st April 2015) - [ Rule 126 ] For the purposes of clause (1) of section 6, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, shall not include the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage. Citizen of India shall be deemed to be resident of India but not ordinarily resident [Section 6(1A) w.e.f A.Y. 2021-22] - Notwithstanding anything contained in section 6(1) an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature Non- Resident in India : Under Sec. 2(30) of the Income Tax Act, 1961 an individual who does not fulfill any of the two conditions given in Sec. 6(1) (a) or (b) would be regarded as Non-Resident assessee during the relevant previous year for all purposes of this Act.