What are the rules for determining the residential status of an individual assessee?

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Rules for determining the residential status of an individual assessee

A.Resident in india

B.Non-resident in india

Again if a person is resident in india he may be;

i.Ordinary Resident

ii.Non Ordinary Resident

Resident of india or When a person is said to be resident in india

An individual satisfies any one of the following conditions, he will be called resident in india.

i.He is in India for a period of 182 days or more than in the relevant previous year.

ii.He is in India for 60 days or more during the relevant previous year and he has been in India for 365 days or more during the 4 previous years immediately preceding the relevant previous year.

if an individual satisfies condition number 1 then he is not required to see condition number 2.

There are certain exceptions to the above rules. If an individual citizen of India leaves India in any previous year for employment outside or as a crew member of an Indian ship, the period of 60 days in condition number 2 will be submitted by 182 days from assessment year 1983-84 onwards.

If an individual who is a citizen of India or a person of Indian origin and remains outside India comes to visit India in any previous year his period of stay should be 182 days instead of 62 days in condition number 2.

Some o the important points regarding above discussion are

i.Relevant previous year means the previous year for his residential status is to be determined.

ii.While calculating the period of stay in India, it is not necessary that the stay should be for a continuous period.

iii.It is not necessary that the stay should be only at one place in india.

iv.For completing the period of 182 days of entry into india and the day of entry into india and the day of departure from india should both be treated as stay in india.

v.Place and pourchase of stay in india is immaterial.

vi.An individual will be treated as present in india, if he is at any place within the territorial water of india.

vii.If stay is given in days and hours, 24 hours should be taken as 1 day.

For example:

A person was in india for 82 days and 6 hrs and again he came to india for 20 days & 20 hours, so his stay in india will be taken as 82 days 6 hours + 20 hours = 105 days

viii.Employment includes independent practice abroad or business activities in a foreign country.

A person making toor abroad but in connection with his employment in India will not be eligible for relaxation provided under exception one. A resident may be:

a.Ordinary Resident

b.Nonordinary Resident

When a resident is called ordinary resident

A resident will be called as ordinary resident if he satisfies both the conditions given below:

i.He should be resident in india for at least 9 out of 10 previous years preceding the relevant previous year.

ii.He should be in India for at least 730 days during the 7 years preceding the relevant previous year.

When a resident will be called not ordinary resident

If a resident does not satisfy both the conditions for ordinary resident, he is called as non resident of india.

Non resident:U/S 2(30) of income tax act 1961, an assessee who does not fulfill any one of the two basic conditions of residence, will be called as non resident.

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