RESIDENTIAL STATUS AS PER INCOME TAX
MEANING OF RESIDENTIAL STATUS
The taxability of an individual in India depends upon his residential status in India for any particular financial year. An individual may be a citizen of India but may end up being a non-resident for a particular year. The residential status of different types of persons viz an individual, a firm, a company etc. is determined differently
CLASSIFICATION OF RESIDENTIAL STATUS’S
- A resident and ordinarily resident (ROR).
- A resident but not ordinarily resident (RNOR)
- A non-resident (NR)
DETERMINATION OF RESIDENTIAL STATUS
If any individual satisfies any one basic condition (at least one) then he is treated as Resident in India otherwise Non-resident in India. If any individual become resident in India, then we have to check that such person is Resident and ordinarily resident (ROR) in India or Resident but not ordinarily (R but NOR) resident in India. If such assessee satisfies both the additional conditions then he is treated as R and OR otherwise R but NOR.
The day on which he enters India, as well as the day on which he leaves India, shall be taken into account as the stay of individual in India.
IN THE BELOW MENTIONED CASES, ONLY THE CONDITION OF 182 DAYS OR MORE WILL BE APPLICABLE AND NOT THE SECOND BASIC CONDITION: –
- Indian Citizen leaves India during the P.Y. for an employment outside India.
- Indian Citizen being a crew member of Indian Ship, leave India during the P.Y.
- Indian Citizen or person of Indian origin engaged outside India in any employment or a business or profession, and visiting India during P.Y. & his total Income (Excluding Income from Foreign Sources) is upto Rs.15 lakhs in the P.Y.
*Person Of Indian Origin means, he or either of his parents or either of his grandparents were born in undivided India.
Note: – In the above point (3), if the income exceeds 15 lakhs, then 2nd basic condition applicable, but 120 days will be considered instead of the 60 days.
In case of any citizen, crew member of a foreign bound ship (originated from India and destination outside India or Vice versa) leaving India, followings days shall be treated as stay outside India, – From the date entered into the continuous discharge certificate (CDC) is respect of joining the ship & ending the date entered into CDC in respect of signing off the Ship.
DEEMED RESIDENT: –
In case of Indian Citizen, having total Income (other than foreign source income), exceeding Rs.15 lakhs during the PY shall be deemed to be resident in India in that PY, 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 & he is always treated as R but NOR.
TAXABILITY OF INCOME FOR INDIVIDUAL & HUF.
| S.No. | Income | R & OR | R but NOR | NR |
| 1 | Indian Income | Taxable | Taxable | Taxable |
| 2 | Foreign Income – Income from Business or Profession controlled/ setup from India. | Taxable | Taxable | Not Taxable |
| -Other Foreign Income | Taxable | Not Taxable | Not Taxable |
TAXABILITY OF INCOME FOR OTHER ASSESSEE.
| S.No. | Income | Resident | NR |
| 1 | Indian Income | Taxable | Taxable |
| 2 | Foreign Income
| Taxable | Not Taxable |
RESIDENTIAL STATUS OF HINDU UNDIVIDED FAMILY/ FIRM/ AOP/ BOI/ LOCAL AUTHORITY/ AJP
RESIDENTIAL STATUS OF COMPANY
- Indian Company: – Always Resident.
- Other Company: – If place of effective management is in India in that year, then resident otherwise Non-resident.
ILLUSTRATION
ILL 1. Mr. Ali is an Indian Citizen, working in USA with Facebook Inc. During the PY 20-21 and PY 23-24 he visited India for 177 days and 145 days respectively. His stay in India for PY 17-18, PY 18-19, PY 19-20 – 120 days, 100 days & 155 days respectively.
His Income for PY 23-24 as follows: –
Income from salary, rent & Interest Earned in USA 25,00,000
Income from Business in USA (Controlled from USA) 21,00,000
Income from Business in USA (Controlled from INDIA) 8,00,000
Interest on Bank FD with Yes bank in Mumbai 11,00,000
LIC Premium paid in India 2,60,000
Determine his residential status for AY 24-25.
ANSWER: – For AY 24-25
Mr. Ali is in India for 145 days & his total Income (other than Foreign Income) is Rs.17,50,000 [11,00,000+800000-150000)] & also his stay in India in last 4 PY’s is more than 365 days (120+100+155+177=552) so he will be treated as R but NOR for AY 24-25.
ILL 2: – Suppose in example 1 Mr. Ali’s Bank Interest is Rs.8,40,000 instead of Rs.11,00,000. What will be your answer?
ANSWER: – For AY 24-25 he will be treated as NR in India as his total Income other than foreign source income is upto 15 lakhs i.e., 14,90,000 (8,40,000+8,00,000-1,50,000) and his stay in India is also less than 182 days.
