NRI-Non Resident Indian - Who
is Resident Indian & who is an NRI??
(Applicable Section 6
of the Income Tax Act)
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:
- Resident Indian
- Resident but not ordinarily Resident Indian (only for
Individuals & HUF) &
- 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
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
- 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
Firms & AOP
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
during that year.
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 is Resident in India if during the previous year if any one
of the following conditions is satisfied:
- Its effective management is in India
Resident in India
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
- 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.
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
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