Residential Status Test For NRI
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How to Find Out whether a Person is Resident or Non Resident in India?
There are three steps to
Step 1- First find out whether such individual is “Resident in India”
Step 2- If such individual is “Resident” in India, then find out whether he is “Ordinarily Resident” in India.
| RULE OF RESIDENCE AT A GLANCE | ||
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Resident and Ordinarily Resident (ROR)
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Resident and Not Ordinarily Resident (RNOR) |
Non-Resident (NR)
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Must satisfy at least one of the basic conditions and both additional conditions [i.e., one of (a) or (b) and both of (i) and (i)
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Must satisfy at least one of the basic conditions and one or none of the additional conditions [i.e. one of (a) or (b) and one or none of (i) or (i)]
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Should not satisfy any of basic conditions.
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Step 1 – Basic Conditions To Test As To When An Individual Is Resident In India-
Under section 6 (1) an Individual is said to be resident in India in any previous year, if he satisfies at least one of the following basic conditions-
- he is in India in the previous year for a period of 182 days or more: OR
- he is in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.
| BASIC CONDITIONS AT A GLANCE | ||
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An Indian citizen who leaves India during the previous year for the purpose of employment or, as a member of the crew of an Indian ship
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An Indian citizen or a person of Indian origin (who is abroad) who comes to India on a visit during the previous year
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An individual other than an individual mentioned in columns (1) and (2)
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| (1) | (2) | (3) |
| a. Presence for at least 182 days in India during the previous year b. Non-functional |
a. Presence for at least 182 days in India during the previous year b. Non-functional |
a. Presence for at least 182 days in India during the previous year b. Presence in India for at least 60 days during the previous year to 365-days during last 4 Previous Years |
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ADDITIONAL CONDITIONS AT A GLANCE
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i. Resident in India in at least 2 years out of last 10 previous years for must satisfy at least one of the conditions, in 2 out of 10 immediately preceding previous years ii. Presence of at least 730 days in India during 7 preceding previous years |
Step 2- If such individual is “Resident” in India, then find out whether he is “Ordinarily Resident” in India by checking Additional Conditions.
Under section 6(1) an Individual is said to be Ordinarily Resident in India in any previous year, if he satisfies at least one of the basic conditions and one or none of the additional conditions [i.e. one of (a) or (b) and one or none of (i) or (i)]
Deemed Resident but Not Ordinarily Resident in India
This exception under the Income Tax Act is applicable from the financial year 2020-21. Under this exception, an individual shall be deemed to be Resident but Not Ordinarily Resident in India if he satisfies the following 4 conditions-
- he is an Indian citizen or a person of Indian origin:
- his total income (other than the income from foreign sources) exceeds Rs.15,00,000 during the relevant previous year.
- he comes to India on a visit during the relevant previous year, and
- he is in India for 120 days (or more but less than 182 days) during the relevant previous year and 365 days (or more) during 4 years immediately preceding the relevant previous year.
This exception is not applicable in the case of a foreign citizen, even if he is a person of Indian origin.
Person of Indian origin-A person is deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.
Please reach out to us in case you wish to get a free evaluation of your Residency Status in India.
