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How to determine residential status of an individual under Section 6(1) of the Income Tax Act

An Individual can either be:

  1. Resident and ordinary resident in India
  2. Resident but not ordinary resident
  3. Non-resident in India

Resident and ordinary resident

To find out whether an Individual is “Resident and ordinary resident” in India, following two steps are satisfied-

Step 1: An individual is “Resident” in India

Step 2: If such Individual is “Resident” in India, then find out whether he is “ordinary resident” in India or “Non-resident” in India

Step 1: An individual is “Resident” in India

An individual is said to be Resident in India in any previous year if he satisfied one of the following basic conditions –

  • He has been in India in the previous year for 182 days or more
  • He has been in India in the precious year for 60 days or more and 365 days or more during 4 years immediately preceding the previous year

If any one of the following Basic condition is satisfied then an Individual is treated as “Resident” in India if not satisfied an Individual is treated as “Non-resident” in India

Step 2: An Individual is “ordinary Resident” or “Non-resident” in India

If an Individual is Resident in India, then the following both additional conditions are satisfied for “ordinary resident”

  • He has been resident in India in at least 2 out of 10 previous years immediately preceding the relevant previous year.
  • He has been in India for 730 days or more during 7 years immediately preceding the relevant previous year.

If the both additional condition and one Basic are satisfied, an Individual is treated as “Resident and Ordinary resident” in India and

Resident but not ordinary resident

If any one of Basic condition is satisfied and any one of the following additional condition is not satisfied, an Individual is treated as “Resident but Not ordinary Resident” in India

Reference: section 6 of Income Tax Act, 1961

Residence in India

For the purposes of this Act,—

(1). An individual is said to be resident in India in any previous year, if he—

  1. is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or
  2. having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

Explanation.—In the case of an individual,—

  1. being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;
  2. being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted.

(2). A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

(3). A company is said to be resident in India in any previous year, if—

  1. it is an Indian company ; or
  2. during that year, the control and management of its affairs is situated wholly in India.

(4). Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

(5). If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.

(6). A person is said to be “not ordinarily resident” in India in any previous year if such person is—

  1. an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
  2. a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.


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3 thoughts on “How to determine residential status of an individual under Section 6(1) of the Income Tax Act
  • roshan jain says:

    great

  • Pooja Agarwal says:

    Please solve my Query…………!!!
    If a Person (Foreign Citizen) comes India for Business purpose and
    He stay in India for:

    50 Days + 20hrs for the first time,
    100 Days + 15 hrs for the 2nd time,
    &
    29 Days + 5 hrs for third time
    In the same P.Y 2012-13.

    Is he Resident of India for A.Y 2013-14 ?????????

    (51+101+30)Days = 182 Days hoge…????
    Ya
    Days ko separate count karenge & Hours ko Separate.
    (50+100+29)Days + (20hrs+15hrs+5hrs) = 181 Days Hoge….????

    • admin says:

      Pooja ji, Days are counted not hours So even if you come in India at 11 pm then it will counted single day.