INCOME TAX ACT OF 1961

The basis of determination of residential status is laid down under the provisions of section 6. There are three types of residential status Resident Resident and Not Ordinarily Resident Non-Resident    .RESIDENTIAL STATUS & TAX LIABILITY Residential status is required to be determined for each assessment year in order to determine the scope of total income.

. 2. 1. Or He is in India for a period or periods amounting in all to 60 days or more in the previous year and 360 days or more during the 4 years preceding that previous year.BASIC CONDITION & ADDITIONAL CONDITION Basic condition Assessee resides in that year for at least 182 days or more in India.

Note: Day of arrival and departure in india will be included in calculating 182 & 60 days. 2. . 1. Assessee should resided for 730 days in 7 previous years just before previous year. Additional Condition Following two conditions should be completed simultaneously. Assessee should fulfill basic condition for 2 years in 10 previous years just before previous year.

Status Basic Condition Additional Condition Ordinary Resident Yes Yes Non Ordinary Resident Yes No Non Resident Indian (NRI) No Yes/No .

salaries. foreign agriculture income etc. 1. dividend. . 3. commission.8 & 9 Accrued In India First receipt in India Income from foreign business which is controlled from India (head office in india) Other foreign incomes ² fees. re ntal income. interest. 4.CRITERIA OF TAX LIABILITY ON TOTAL INCOME As per Sections 7. 2.

ON THE BASIS OF THE RESIDENTIAL STATUS THE FOUR ABOVE MENTIONED INCOMES ARE MADE TAXABLE Ordinary Resident Accrued In India Foreign business income controlled from india First receipt in India Other foreign incomes .

NOT ORDINARY RESIDENT Accrued In India Foreign business income controlled from india First receipt in India Other foreign incomes .

NON RESIDENT INDIAN Accrued In India Foreign business income controlled from india First receipt in India Other foreign incomes .

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