Understanding Residential Status as per Income Tax Act – H&R Block
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Understanding Residential Status as per Income Tax Act

An Individual is said to be a resident Indian for the purpose of Income tax if one of the following Basic conditions are satisfied.

  1. An Individual is in India for a period of 182 days in the financial year in which he is getting his salary income or;.
  2. An Individual is in India for a period of 60 days or more during financial year in which he gets his salary and 365 days or more during 4 years immediately preceding to that financial year.

If one of the above conditions are satisfied then he is resident of India as per Income Tax eye but an individual needs to find out whether he is resident and ordinarily resident  or resident but not ordinarily resident. If the Individual fulfils one the following conditions then he said to be resident but not ordinarily resident of India:

  1. An Individual is a non-resident in India for 9 years out of 10 years immediately before relevant financial year.
  2. An Individual is in India for a period less than 729 day during 7 years immediately before the relevant financial year.

Else, he is considered as a resident and ordinarily resident in India.

These conditions need to be tested every year for every Individual as taxability of Income is dependent upon whether he is a resident and ordinary resident or Resident but not Ordinary resident or Non Resident.

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Chetan Chandak (B.Com, LLB)
Chetan Chandak (B.Com, LLB)
Chetan is the Head of Tax Research at H&R Block (India) with an experience of more than a decade in tax advising. He is also a regular contributor for some of the leading news publications in India such as Economic Times, Financial Express and Money Control. Professionally, Chetan is fascinated by international taxation and expat-related tax research.