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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7 Comments

  1. Bhavyesh Shah says:

    hello as I mention above you know my name. Come to the topic, i am now out of india for 2 years for job. I am Indian origin. So i want to ask you there is any tax on my income in India???

  2. Suraj Khalatkar says:

    I am Indian Origin, Leave India in Nov 2015 Upto that for last six months I worked for Indian Co.I have Some rental income and loan on the same. But for same I did not file Tax return for FY 15-16 and FY 16-17. Plz guide me throughout the issue.

    • sangamesh says:

      For FY 15-16, you need to pay tax on both your India Income and your foreign currency salary. You can claim interest expense against the rental income. However, you will get tax rebate for the income tax paid outside India on the foreign currency salary. For FY 16-17 your foreign salary is exempt for tax. You still need to file return for India income

  3. mansi desai says:

    hi,

    absolutely i agree with your statement cause i am also doing that things so thanks for this posting

  4. Mithun Ghosh says:

    Hi,

    In FY 2017-18 from period of 1st April 2017 to 11 July 2017 I was employed in India and my Indian employer deducted tax after that I was working in foreign country from 1st August 2017 to 31st Dec 2017(Foreign employer) and quit and back to India. Post that I was not working till date in this scenario could you please let me know whether I would be consider as resident or non-resident?

    Next part of my query is that I am working in a non-taxable country where my income was not taxed in that case for these 5 months how to derive the taxable income slab ?

  5. Heera says:

    For FY 2017-18, an assessee was in India for more than 182 days and was on in foreign for 90 days on employment (salaried person). For FY 2017-18, he will be considered as Resident. My query is for FY 2018-19, he will be on foreign employment and visit India for 180 days on work basis. Could you please tell me his residential status?

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