The residential status of an individual is the basis for his/her income tax liability. It is important for the taxpayer to state his/her residential status while filing income tax return. According to the Income Tax Act, the taxpayers are categorized into –
- Resident and ordinarily resident.
- Resident but not ordinarily resident.
- Non-resident.
Residential status – Individual taxpayers
Resident and ordinarily resident or Ordinary resident
An ordinary resident in India is the one fulfilling the following conditions:
- The individual must be residing in India for 182 days or more in that particular year.
- The individual must be residing In India for about 365 days in the previous four years of that particular year or for 60 days or more in that year.
If the individual leaves India for employment purpose during an FY, he has to stay for 182 days or more in India for his consideration as a resident and the above mentioned second point would not applicable in this case.
Resident but not ordinarily resident
An individual is not ordinarily resident if the following conditions are fulfilled:
- The individual must be a non-resident in nine out of ten previous years of that particular year in India.
- The individual have stayed in India for less than 730 days in the previous seven years of that year.
Non-Resident
If the individual does not fulfill the criteria mentioned in Resident and Ordinarily resident is a Non-resident.
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