Basics of Tax- Determination of Residential Status

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The Residential Status of an Individual is to be determined on the basis of period of stay of the taxpayer in India and is computed separately for each year. If an individual satisfies any one of the following conditions, he is said to be Resident in India for that financial year.

The basic conditions are:

a. He is in India for a period of 182 days or more in that financial year
OR
b. He is in India for 60 days or more during that financial year and has been in India for 365 days or more during 4 previous years immediately preceding the relevant financial year.

If any one of the above conditions is satisfied, the individual is said to be resident in India. However, if none of the conditions is satisfied, he is said to be a Non Resident.

The additional conditions are:

As per Section 6(6), a person shall be not ordinary resident in India if he satisfies any one of the following conditions:

a. He has been a non-resident in 9 out of 10 years immediately preceding the Financial Year
OR
b. He has been in India for a period of 729 days or less in 7 previous years immediately preceding the financial year.

If any 1 of the above conditions is satisfied, the person is said to be resident but not ordinary resident in India. However, if none of the above conditions is satisfied, the person is said to be Resident and Ordinary Resident in India.

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