Residential status of an individual

Non-Resident

Dear Sir,

As you have satisfied the basic condition of 6(1)  and two additional condition of the IT act 

Basic condition: Stay in India for the immediately 4 preceding years is 365 days or more and 60 days or more in the relevant financial year

And two additional condition:

1. Has been a resident of India in at least 2 out of 10 years immediately previous years and

2. Has stayed in India for at least 730 days in 7 immediately preceding years

So your residential status will be Resident.

Regards

CA Sagar Basu

 refer the act which states as follows However, in respect of an Indian citizen and a person of Indian origin who visits India during the year, the period of 60 days as mentioned in (2) above shall be substituted with 182 days. The similar concession is provided to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India." but in your case since income exceds 15 lakhs : The Finance Act, 2020 has introduced new section 6(1A) to the Income-tax Act, 1961. The new provision provides that an Indian citizen shall be deemed to be resident in India only if his total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. For this provision, 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). However, such individual shall be deemed to be Indian resident only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature.

To determine the residential status of your client for the FY 2023-24, we need to apply the relevant provisions of the Income Tax Act, 1961.

Residential Status Criteria

1. Resident: An individual is considered a resident in India if:

   • They are in India for 182 days or more during the financial year, OR
   • They are in India for 60 days or more during the financial year and 365 days or more during the 4 immediately preceding financial years.

2. Resident but Not Ordinarily Resident (RNOR): An individual is considered RNOR if they meet the resident criteria but:

   • They have been a non-resident in India in 9 out of the 10 previous years preceding that year, OR
   • They have been in India for 729 days or less during the 7 preceding financial years.

Analysis:

• For the FY 2023-24, your client's stay in India is less than 182 days.
• For the FY 2023-24, your client's stay in India is 167 days. He does not meet the criteria of 182 days or more during the financial year.
• For the second condition (60 days in the current year and 365 days in the last 4 years), your client meets the condition of 60 days in the current year but it is not required to check further as he meets the primary condition.

However, since he has been a resident of India in 2 out of the 10 preceding previous years and his stay in India exceeded 729 days in the preceding 7 financial years, he qualifies as a resident for FY 2023-24.

But, given his income for FY 2023-24 is below 15 lakhs (excluding NRE deposit interest), he falls under the special condition for RNOR.

Conclusion:

For the FY 2023-24, your client’s residential status would be:

Resident but Not Ordinarily Resident (RNOR)

If you have any further questions or need additional clarification, please feel free to ask.

For detailed, personalized advice, consider a phone consultancy.

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Thank you.

Shubham Goyal

Why did he left India in FY 2023-24? This question will decide his residential status.

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