Residential status has considerable bearing for charging of Income Tax. Based on residence, a person can be Resident and Ordinarily Resident, Resident and Not Ordinarily Resident or Non-Resident.

In case a person is ‘resident and ordinarily resident’ in India, he is required to pay income tax on his entire income whether earned in India or abroad. But in case of the other two categories i.e., ‘resident and not ordinarily resident’ and ‘non-resident’, the entire income is not necessarily subjected to tax in India.

If a person does not satisfy any of the under mentioned conditions then the person will be Non-Resident (NRI).

1. If your stay in India is 182 days or more during previous year.
2. If your stay in India is 60 days or more in Previous year and 365 days or more during four years preceding to previous year.

BUT IN CASE where a person leaves for employment or where a resident who leaves India as a member of Crew of Indian ship or where an Indian Citizen who is abroad comes to India for a visit, the period of stay would be 182 days instead of 60 days in the previous year as per above point (2).

The following incomes of a ‘non-resident’ are taxable in India –

• The income which is received or deemed to be received in India by him or on his behalf, and
• Income which accrues or arises or is deemed to accrue or arise in India during the previous year.

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