Executive Summary – It is important to ascertain the residential status of a person to find out the person’s tax liability. A person of Indian origin can be a Resident or Non Resident. A Resident of India can be Resident and Ordinary Resident or Resident and Non-Ordinary Resident. The duration of stay in India determines the residential status. Income tax laws are applicable as per residential status and the way the income earned.
If a person is a resident in India and a non-ordinary resident,
– Income received in India
– Income earned in India
– Income to be accrued in India or
– Income accrued or received outside India from a business controlled in India
are taxable in India as per the income tax laws.
– Income received in India
– Income earned in India
– Income to be accrued in India or
– Income accrued or received outside India from a business controlled in India
are taxable in India as per the income tax laws.
For a non-resident,
– Income received in India (whether earned in India or abroad) or
– Income accrued in India
are taxable in India as per the income tax laws
There have been some announcements recently on the residential status for determination of income tax payable. Let us look at the details –
1) If you are an Indian citizen who has left India for employment or other purposes or as a crew member of an Indian ship or are a Person of Indian origin who visits India, determine your residential status in the following manner –
1) If you are an Indian citizen who has left India for employment or other purposes or as a crew member of an Indian ship or are a Person of Indian origin who visits India, determine your residential status in the following manner –
2) If you are an Indian citizen who has left India for purposes OTHER THAN employment or other purposes or as a crew member of an Indian ship, determine your residential status in the following manner –
3) If you are an Indian citizen or a POI who is returning to India permanently, determine your residential status in the following manner –
The personal income tax rules applicable on Indian residents depend on the duration of their stay in the country and manner in which they get income in their hands.
A resident can be classified as Ordinary Resident or Non-Ordinary Resident. A person is considered an Ordinary Resident –
If the person has lived in India the last 9 out of 10 years considering the current financial year.
OR
If the person has lived in India for more than 729 days in 7 years preceding the current financial year.
If a resident does not satisfy the criteria for an ordinary resident, the resident is considered as Resident and Non-ordinary Resident.
If the person has lived in India the last 9 out of 10 years considering the current financial year.
OR
If the person has lived in India for more than 729 days in 7 years preceding the current financial year.
If a resident does not satisfy the criteria for an ordinary resident, the resident is considered as Resident and Non-ordinary Resident.
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