Resident in India

An individual is said to be a resident in India, if he satisfies any one of the following conditions -
i) He is in India in the previous year for a period of 182 days or more [Sec. 6(1)(a)]; or
ii) He is in India for a period of 60 days or more during the previous year and for 365 or more
days during 4 previous years immediately preceding the relevant previous year [Sec. 6(1)(c)]
Given Conditions are alternative in nature i.e. assessee needs to satisfy any one condition.

Non-Resident in India
An assessee who is not satisfying sec. 6(1) shall be treated as a non-resident in India for the
relevant previous year.
Exceptions to the above rule
A. In the following cases, condition (ii) of sec. 6(1) is irrelevant:
1. An Indian citizen, who leaves India during the previous year for employment purpose.
2. An Indian citizen, who leaves India during the previous year as a member of crew of an
Indian ship.
Above assessee shall be treated as resident in India only if he resides in India for 182 days or
more in the relevant previous year
B. In case of an Indian citizen or a person of Indian origin comes on a visit to
India during the previous year, modified condition (ii) of sec. 6(1) is applicable:
Case Modified condition (ii) of sec. 6(1)
His total income, other than the income from foreign sources, exceeds ` 15 lakhs
during the previous year He is in India for a period of 120 days or more (but less
than 182 days) during the previous year and for 365 or more days during 4
previous years immediately preceding the relevant previous year.

His total income, other than the income from foreign sources, does not exceed `
15 lakhs during the previous year. He is in India for a period of 182 days or more
during the previous year and for 365 or more days during 4 previous years
immediately preceding the relevant previous year.
p “Income from foreign sources” means income which accrues or arises outside India (except income derived from
a business controlled in or a profession set up in India) and which is not deemed to accrue or arise in India.
C. An individual shall be deemed to be resident in India, if following conditions are satisfied
a. He is a citizen of India
b. His total income, other than the income from foreign sources, exceeds ` 15 lakhs during the previous year;
c. He is not satisfying any of the basic conditions given u/s 6(1) [i.e., 182 days or 60 days + 365 days]; and
d. He is not liable to tax in any other country or territory by reason of his domicile or residence or any other
criteria of similar nature. [Sec. 6(1A)]

To be a Resident & Ordinarily resident in India, one has to satisfy at least one condition of sec. 6(1) & both the
additional conditions of sec. 6(6).
Resident but not ordinarily resident
If a resident individual does not satisfy both additional conditions as given u/s 6(6), he is “Resident but not
ordinarily resident in India”.
A resident individual in India can further be categorised as -
i) Resident and ordinarily resident in India ii) Resident but not ordinarily
resident in India
Resident and ordinarily resident
If a resident individual satisfies the following two additional conditions, he will
be treated as resident & ordinarily resident in India -
(a) He has been resident in India [as per sec. 6(1)] in at least 2 out of 10
previous years immediately preceding the relevant previous year; and
(b) He has resided in India for a period of 730 days or more during 7 previous
years immediately preceding the relevant previous year.
To be a Resident & Ordinarily resident in India, one has to satisfy at least one
condition of sec. 6(1) & both the additional conditions of sec. 6(6).
Residential status of HUF:-
1. A HUF is ordinarily resident in India if
a. The mgt and comntrol of its affairs is situated wholly or partly in India during the previous yr and
b. Its mgr (Karta) has been resident in India for 2 out of 10yrs preceding the previous yr and the mgr has
been in India for a period or periods amounting in all to 730 days or more during 7 yrs preceding the
concerned p.y.
2. A HUF is NOR, if the control and mgt of its affairs is situated wholly or partly in India during the PY but its
Karta is NOR.
3. if the control and mgt of affairs is situated wholly outside India s Non-resident.
R.S of AOP firm BOI:-
control and mgt of its affirs is situated wholly fro m outside India. Firm,AOP can never be NOR.
R.S OF Joint stock companies (sec 6.3)
A co. is resident in India if ,
a. it is an Indian Co.
b. A place of Effective Mgt( POEM) is in India in that yr.therefore a foreign co, is resident in India if its (POEM
) is in India during the relevent PY. POEM is appicable to foreign co. omly if its turn over or gross receipts is
more than Rs.50 crore. a co. which never be a NOR. above 50 crore turnover is always non resident.
.Indian co.:-
for the purpose of IT Act an Indian co. means a co. formed and regd
under the co.act 2013 and includes :
a. a co. formed and regd under any law relating to companies formerly
in force in any part of India ( other than J &K and the union territories
where the co was regd as the prevailing law there.)
b. a corporation established by or under a central,state provincial act.
c. any institution , association or body which is declared by the CBDT to
be co.
Key points:-
1.if a person is resident in india for one source of income he will be deemed to be resident in
India for all other sources of incoes during the P.Y.

2.Income received or deemed to be received and income accruing or arising or deemed to

accrue or arise in India would be taxable in the hands of all , irrespective of residential status.

3. Foreign income is taxable in hands of a person who is reident in India but will be taxable in
the hands of non resident assessee only if it is received or deemed to be received in Inda.

4.In the case of NOR assessees, foreign income would be taxable only when it accrues or arises
from a business controlled from India or profession set up in India.
5. Dividend from Indian co. is taxable in full.
6.Gift from relatives is not taxable . Any gift received on the occassion of marriage is not taxable.
7.Income from abroad is fully taxable n the case of ordiarily resident assesseees.
date of entry and exit are counted to determine R.S.
8.when the 1st basic condition is satisfied , the second basic condition is irrelevant.
9.Profit from business in india and profit from the sale of asset in india are taxable
in all cases of assessees.
10.Income received in india is taxable in all cases but received abroad and subsequent remittance of the amt to india by a non- resident will not make it taxable
in India.

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11.Income reeived in India or abroad is taxabe in the hands of ordinarily
resident assessees but income earned abroad is not taxable in India in the
hands of Non-resident assessees. such income will be taxaable in the hands of
NOR, if the business is conrtrolled from India.

12. past untaxed profit brought to India is not income , it is only a remittance.
13. pension from Indian co. is taxable in case of all assessee.
14. Gift above 50,000 is taxable.
When an URPF is recgnized by the Commisssioner of IT in a particular yr, the existing balance
in the fund to the credit of the employee is transfered to the RPF. such amt is called
transferred balance, which is taxable in the hands of the assessee as income deemed to be
received during the PY in which such transfer takes place and taxable as salary income.