IMPORTANCE OF RESIDENTIAL STATUS

Country has right to tax ALL income of it’s Residents Person

Residents Country has right to tax ALL income which arise in his own country by Any Status of person.

Income

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

C O M M E R C E

DIFFERENT TYPE OF RESIDENTIAL STATUS

Residential Status

Resident

Resident & Ordinary Resident

Resident but Not Ordinary Resident

Non-Resident

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CRITERIA USED TO DETERMINE RESIDENTIAL STATUS

• Individual

• HUF

• Company

• Others

Decide type of Person

• Nos Of Days Stay in India during previous year.

• Place of Incorporation

• Place of Management

Criteria according to type of Person can be

• To be Resident but Not Ordinary Resident.-Only Individual & HUF

Once Resident Status is determine, then further

following Criteria need to satisfy

Non-Resident

Resident

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CRITERIA FOR INDIVIDUAL TO DECIDE RESIDENTIAL STATUS

If stay in India is less than 60 days

during previous year i.e.

Non-Resident

“B”

If it’s between 60 days and 181 days during previous year

than--- check last 4 previous years record

preceding the previous year total number of days stays,

If stay is more than or equal to 182 days

during previous year i.e. Resident

365 days

or more

In the following Situation above “B” is not applicable (i.e. can Stay in India upto 181

days and will be considered as Non-Resident:-

a) An Indian Citizen who leaves India for purpose of Employment outside India

b) An Indian Citizen or India Origin come to visit India i.e. on Holiday. C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

C O M M E R C E

RESIDENTIAL STATUS CAN VARY FROM YEAR TO YEAR

1) Stay in India need not be the continuous period of stay

2) The stay in India need not be the active one i.e. it can be on holiday also

3) For purpose of counting the days both the date of arrival and departure should

be counted

4) The date of arrival and departure should be counted as per the stamping in

passport.

5) Stay include stay in territorial water i.e. 18 nautical miles from land (22Kms)

6) Stay even on ship within above will be counted

7) PIO (Person of Origin) status is examined only for those who does not hold

India passport)

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

C O M M E R C E

RULES FOR DETERMINING RESIDENT BUT NOT ORDINARY RESIDENT

RNOR is a person

who satisfy any one of

the conditions specified

(Sec 6(6))

• 1) If such individual is Non-Resident in 9 out of 10 previous year preceding the previous year.

• 2) If such individual stay in India in 7 previous year preceding the previous year is less than 730 days.

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

C O M M E R C E

ILLUSTRATIONS 1 :-

Mr. Bharat, an

Indian national,

left India for

Denmark on 1st

January 2013.

He returned to

India on 31st

May 2014. He

got as

ownership flat in

Thane.

Determine his

residential

status for the

assessment

years 2013-14

and 2014-15. C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

C O M M E R C E

ILLUSTRATIONS 2 :-

Mr. Anand who

was abroad

returned to

India 25th June,

2013 and again

left India on 15th

January, 2014.

What is his

residential

status for the

Assessment

Year 2014-15

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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ILLUSTRATIONS 3 :-

Mrs. Bharati who is

an Indian citizen

came on a visit to

India on 1st June,

2013. She left India

on 30th Nov. 2013.

Prior to 1-4-2013

she was in India for

more than 365 days

during the

preceding four

previous years:

2009-10 to 2013-13

what is her

residential status for

assessment year

2014-15?

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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ILLUSTRATIONS 4 :-

Mr. Rajesh who is

an Indian citizen

leaves India on 27th

September 2013 for

the purposes of

employment outside

India and comes to

Indian on 1st April

2014. He was in

India for more than

365 days during the

four preceding

previous years

2009-10 to 2012-13.

What will be

residential status of

Mr. Rajesh for the

assessment year

2014-15?

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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ILLUSTRATIONS 5 :-

Mr. James Brown of

America came in

India for the first

time on 1st April,

2012 and started

the business in

Mumbai. What is his

residential status for

the assessment

year 2014-15

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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ILLUSTRATIONS 6 :-

Mr. Harihar from Sri

Lanka came to India

for the first time on

1st November 2012.

He was in India

upto 31st October,

2013 on Which day

he left for Japan.

During his stays at

Delhi upto 31st

March, 2013 and

thereafter remains

in Mumbai till his

departure from

India. What is his

residential status for

Assessment Year

2013-14 and 2014-

15?

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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ILLUSTRATIONS 7 :-

Mr. Vishal was born

in Nasik in 1980. He

went to went to New

York in 1983 and

was there till 31st

March, 2004.

Thereafter he

returned to India.

What is his

residential status for

the Assessment

Years 2013-14 and

2014-15?

C A R A J E S H D A L A L - J . M . P A T E L C O L L E G E O F

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