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Residential Status of an
'Individual' (Section-6) -
under Income Tax Act.

When an individual is said to

be 'Resident' in India ?
An individual is said to be resident in India if he
satisfies any one of the following two
conditions:

He is in India for a
period or periods
amounting in all to 182
days or more in the
relevant previous year;
OR

He is in India for 60
days or more during the
relevant previous year
and has been in India
for 365 days or more
during 4 previous years
immediately preceding
the relevant previous
year.

Exceptions/Concession: There are two

exceptions/concession to the above rule:

1. In case of an individual, who is a citizen of

India and who leaves India in any previous
year for the purposes of employment
outside India, the condition No. 2 supra
(mentioned above) shall not be applicable
for the relevant previous year in which he
leaves India. In other words, for that
particular previous year in which he leaves
India for the purposes of employment
outside India he shall be called resident
only when he satisfies the condition No. 1
mentioned above. Similarly in case of an
individual who is a citizen of India and who
leaves India in any previous year as a
member of the crew of an Indian ship, the
condition No. 2 supra shall not be
applicable.
2. In case of an individual, who is a citizen of
India, or is a person of Indian origin, who,
being outside India, comes on a visit to
India in any previous year, the condition
No. 2 mentioned above in his case also
shall not be applicable. In other words, he
shall not be a resident in India unless his
stay in India is atleast 182 days during the
relevant previous year in which he visits
India.

1. The above conditions, with

exceptions/concessions may be called as
category 'A' conditions.
2. A person is said to be of Indian origin if
he, or either of his parents or any of his
grandparents was born in undivided India
i.e. before India was partitioned.
[Explanation to section 115C(e)]. 3. In
case of an individual, bring a citizen of
India a member of the crew of a foreign
bound ship leaving India, the period or
periods of stay in India shall, in respect of
such voyage, be determined in the
manner and subject to such conditions as
may be prescribed.

Important explanations :

— Relevant previous year means the previous

year for which the residential status is being
determined.

— In computing the period of stay in India, it is

not necessary that the stay should be for a
continuous period. What is to be seen is the
total number of days' stay in India during the
relevant previous year.

— It is also not necessary that the stay should be

only at one place. e.g., he may stay at Bombay
for 90 days and then go out of India. On return
in the same previous year, he may stay at Delhi
for 120 days during the same previous year. His
total stay in India will be 210 days for that
previous year.

— In computing the period of 182 days, the day

the individual enters India and the day he leaves
India should both be treated as stay in India.

— Place and purpose of stay in India is

immaterial. Presence in territorial waters of
India would also be regarded as presence in
India.

Meaning of employment: The term employment

is not defined in the Income-tax Act.

A man may employ himself so as to earn profits

in many ways. Thus he can set up an
independent practice abroad or businessman
can shift his business activities to a foreign
country. A person merely undertaking tours
abroad in connection with his employment in
India would not be eligible for the relaxation
provided under exception 1.

When an individual is said to

be 'Resident and Ordinarily
Resident' in India ? [Sec. 6(1),
6(6)(a)]
An individual who is resident in India, shall be
resident and ordinarily resident in India if he
satisfies both the following conditions—

He has been 'Resident in India' for

at least 2 out of 10 previous years
immediately preceding the
relevant previous year.

This means that he must have

satisfied any one of the conditions,
with exceptions/concession (given
above) for being a resident for at
least 2 out of 10 previous years
immediately preceding the relevant
previous year.

AND

He has been in India for 730 days or

more, during 7 previous years
immediately preceding the
relevant previous year.

When an individual is said to

be 'Resident but Not
Ordinarily Resident' in India ?
[Section 6(6)(a)]
An individual who is resident in India is said to
be "Not Ordinarily Resident in India" if he does
NOT Satisfy any or both of the conditions
mentioned ABOVE i.e. case of Resident and
Ordinary Resident..

When an individual is said to

be 'Non-Resident' in India
[Section 2(30)]
An individual is said to be a 'Non-Resident', if he
is NOT a 'Resident' in India i.e. none of the
conditions (with exception/concession)
mentioned in ABOVE para is satisfied.

Example :

Rickey Pointing, an Australian cricketer has

been coming to India for 100 days every year
since 2005-06:

(a) Determine his residential status for the

assessment year 2018-19.

(b) Will your answer be different if he has been

coming to India for 110 days instead of 100 days
every year.

Solution :

(a) Rickey Pointing satisfies the second

condition of category (A) because he is in India
for more than 60 days during the relevant
previous year and for 400 days during four years
preceding the relevant previous year.
Therefore, he is a resident.

Further, in this case, although he satisfies the

first condition of category (B) of being resident
for at least 2 out of 10 preceding previous years
but he does not satisfy the second condition of
category (B) as during 7 years preceding the
previous year, he is in India for only 700 days.
He shall, therefore, be a resident but not
ordinarily resident in India.

(b) Yes. He will, in this case, be resident and

ordinarily resident in India. He satisfies both
conditions of category (B) as he was in India for
770 days in the last seven years and he was
resident for at least 2 previous years out of 10
previous years immediately preceding the
relevant previous year.

Rule of Residence in brief in

Table Format : The table given below
highlights the rule of residence in brief for the
assessment year 2018-19 & 2019-20:
TABLE

BASIC CONDITIONS AT A GLANCE

In the case of an In the case of an In the case
Indian citizen Indian citizen or a of an
who leaves India person of Indian individual
during the origin (who is [other than
previous year abroad) who comes an individual
for the purpose to India on a visit mentioned
of employment during the previous in columns
or, in the case year (1) and (2)]
of an Indian
citizen who
leaves India
during the
previous year as
a member of the
crew of an
Indian ship

(1) (2) (3)

a. Presence for a. Presence for ata. Presence
at least 182 least 182 days in for at least
days in India India during the 182 days in
during the previous year India during
previous year 2017-18 the
2017-18 previous
b. Non-functional
year 2017-
b. Non-
18
functional
b. Presence
for at least
60 days in
India during
the
previous
year 2017-
18 and 365
days during
April 1,
2013 to
March 31,
2017.

ADDITIONAL CONDITIONS AT A GLANCE

1. Resident in India in at least 2 years out of
previous years 2007-08 to 2016-17 [or
must satisfy at least one of the basic
conditions, in 2 out of 10 immediately
preceding previous years] (i.e., during the
previous years 2007-08 to 2016-17).
2. Presence of at least 730 days in India
during April 1, 2010 and March 31, 2017.

RULES OF RESIDENCE AT A GLANCE

Resident and Resident and Not- Non-
Ordinarily Ordinarily Resident Resident
Resident

Must satisfy at Must satisfy at Should not

least one of the least one of the satisfy any
basic conditions basic conditions of the basic
and both of the and one or none of conditions.
additional the additional
conditions [i.e., conditions [i.e.,
one of (a) or (b) one of (a) or (b)
and both of (1) and one or none of
and (2)] (1) or (2)]

Example :

Mr.Dust left India for the first time on

November 25, 2015 for meeting his friends.
During the calendar year 2016 he came to India
on September 1 and stayed for a period of 10
days. During the calendar year 2017, he did not
visit India at all but finally came to India on
January 16, 2018. Determine the residential
status of Mr. Dust for the assessment year 2018-
19.

Solutions :

During the previous year 2017-18, the assessee

was in India for 75 days and during the four
years preceding the previous year, he was in
India for 979 days (10 days during 2016-17, 239
days during 2015-16, 365 days during 2014-15
and 365 days during 2013-14).

Thus, he satisfies one of the conditions laid

down in section 6(1) for being treated as
resident in India. In addition, the assessee also
satisfies the two additional conditions laid down
in section 6(6) as he was resident in India in 2
years out of 10 years immediately preceding the
previous year 2017-18 (during the period 2007-
2017 he was resident in India in all the years
except 2016-17) and during 7 years immediately
preceding the previous year 2017-18, he was in
India for more than 730 days.

He will, therefore, be treated as Resident and

Ordinarily Resident in India for the assessment
year 2018-19.

Related Topics ...

Residential Status of an Assessee
Residential Status Of A ' Company '- [Section
6(3)]
Residential Status of an 'Individual' (Section-6)
Residential Status of Firm, Association of
Persons (AOP), Body of Individuals (BOI) and of
Other Persons (except Companies) [Sections 6(2)
and 6(4)]
Residential Status Of HUF (Hindu Undivided
Family) - [Section 6(2)]

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