Residential Status
  • Residential Status Under Income-tax Act,1961
  • Residential Status Under FEMA
The status of a person as a resident or non-resident depends on his period of stay in India. The period of stay is counted in number of days for each financial year beginning from 1st April to 31st March (known as previous year under the Income-tax Act). The definition is explained in simple terms as under.

If an individual who satisfies understated both the conditions of section 6 of the Income-tax Act, then he becomes a Non-Resident.

ConditionStatus
1.He is not in India for 182 days or more during the relevant previous year.If yes, then he is a non-resident. (so check the next condition.)
2.He is not in India for 60 days or more during the previous year and he is not in India for 365 days or more during the 4 years prior to the previous year.If yes, then he is a non-resident.

If you are not satisfying any of the above conditions to become non-resident, check whether following assists you to become a non-resident.

Exceptions

The requirement of stay in India as required in condition 2 above shall not be applicable in the following cases:
o If an individual, being an Indian citizen leaving India for the purpose of employment outside India or as a member of the crew of an Indian ship.
o If an individual, being an Indian citizen or person of Indian origin, is on visit to India.

In other words, the above categorized individuals are non-resident if they satisfy condition “1” alone.

However, if the above conditions are not satisfied, then a person becomes a resident.

Resident but not ordinarily Resident (RNOR):

A person is given a special residential status of RNOR, if he is Resident of India in the previous year and satisfies one of the following conditions:

ConditionStatus
1.He is not a resident, as per the above provisions, for at least 9 out of 10 previous years prior to the previous year under consideration.If yes, he is RNOR
2.His stay in India during the 7 previous year prior to the previous year under consideration should not be 730 days or moreIf yes, he is RNOR

Note:
Generally, a person who is returning to India after 9 years or more of stay outside India (and who was non-resident for each of the 9 years out of 10 years immediately preceding the year of returning to India under the Act) , may remain RNOR for the period of two years.
Residential status of individuals:

Residential status as per Foreign Exchange Management Act, 1999 (FEMA) is determined by the number of days in India in the preceding financial year (FY) and / or the purpose of stay.
  • A person is said to be resident in India if he has resided in India for more than 182 days during the preceding FY and:
    o He has gone out of India for purpose other than employment outside India / other than business or vocation outside India / for a certain period or
    o He has come for employment in India / for carrying on business or vocation in India / for an uncertain period.
  • Similarly, a person is said to be a person resident outside India if he has resided in India for 182 days or less, during the preceding FY and:
    o He has gone out of India for purpose other than employment outside India / other than business or vocation outside India / for a certain period or
    o He has come for employment in India / for carrying on business or vocation in India / for an uncertain period.
  • When a person comes to India for a purpose other than employment / other than business or vocation / for a certain period, he shall be a person resident outside India irrespective of the number of days he spent in India in the preceding FY.
  • When a person goes out of India for the purpose of employment / business or vocation / for an uncertain period, he shall be a resident outside India irrespective of the number of days he spent in India in the preceding FY.

Residential status of other entities:

The following entities are persons resident in India:
  • Any person/body corporate registered/incorporated in India
  • An office, branch or agency in India owned or controlled by a person resident outside India.
  • An office, branch or agency outside India owned or controlled by a person resident in India.

Apart from above, all the other entities are considered to be person resident outside India.

Determination of residential status as per FEMA
FEMA

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