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NRI-Non Resident Indian -
Who is Resident Indian & who is an NRI??
(Applicable Section 6 of the Income Tax Act)



Section 6 of the Income Tax Act contains the rules of residence of a person. Residential status of a person is vital to determine the taxbility of income in his/her hands. For Income Tax there are three categories of persons in India:
  1. Resident Indian
  2. Resident but not ordinarily Resident Indian (only for Individuals & HUF) &
  3. Non Resident Indian

Its very important to determine the residential status of a person as the taxbility and Income Tax Returns to be filed depend upon the residential status of a person. Who is a Resident Iindian or When will a person be treated as Non Resident Indian or Resident but Not Ordinarily Resident is to be determined on the basis of following rules.

When are you a Non Resident in India?
If you do not satisfy the conditions of being resident Indian, you will be a Non resident Indian. So to see if you are an NRI see if you satisfy any conditions of being a resident Indian. See the rules in detail as explained below.

Resident Indian - Rules for Individuals

An individual is a resident of India in a previous year if he/she satisfies any one of the following conditions:
  • He is in India in that year for a period of 182 days or more.
OR
  • he has been in India for 365 days or more during preceeding 4 years and during that year he is in India for 60 days or more.
Note-However if a person leaves India for employment during previous year, this period of 60 days will be 182 days or more. We can say that for a person leaving India for employment during the year, he will be resident in India only if he is in India for atleast 182 days during that year.
Residence Rules for HUF, Firms & AOP
An HUF, Firm and AOP is resident in India if during the previous year
  • the control and management of its affairs is wholly situated in India

Residenence Rules for a Company
A Company is Resident in India if during the previous year if any one of the following conditions is satisfied:
  • Its an Indian Company
OR
  • Its effective management is in India

Not Ordinarily Resident in India

An Individual is said to be a Resident but not ordinarily resident in India if any one of the following conditions is satisfied:
  • He/she was an NRI for 9 years out of 10 preceeding years.
OR
  • He/she was in India for 729 days or less during preceeding 7 years.
For HUF also if the manager of HUF satisfies any one of the above conditions of indiviuals, that HUF will be said to be a Not Ordinarily Resident in India for that previous year.

Important-
If a person is Resident in India for one source of income, he will be treated as resident in India for all other sources of incomes during that year.

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