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Resident status of Individuals as per Income Tax Act, 1961


CA Pulkit Sharma

2014-02-02

Resident status of Individuals as per Income Tax Act, 1961Income tax is levied based on the residential status of a person. For HUF and Individual the residential status is to be arrived based on the definition given in section 6 of Income Tax Act.

As per Section 6 of Income Tax:

(1) An individual is said to be resident in India in any previous year, if he—

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days (182) or more ; or

(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

[Explanation.—In the case of an individual,—

(a) being a citizen of India, who leaves India in any previous year [as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;

(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and 58[eighty-two] days” had been substituted.]

 

A person is said to be “not ordinarily resident” in India in any previous year if such person is

(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or

(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.]

From above definition we can make that:

An individual is resident if he stays for more than 182 days in India in previous year, however if goes out of India for Employment than instead of 182 days 6o days are to counted. And he is ordinary resident if he was resident in India for the more than 2 years excluding previous year.