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Residential Status for Income Tax

author portrait

Hiral Vakil

Income Source
Income Tax
Resident Status
Last updated on May 6th, 2021

The residential status of a taxpayer is determined every year for Income Tax purposes. The taxability of a person depends on their residential status.
The residential status is different from the citizenship of a person. For instance, in a financial year, a person can be a citizen of India but not a resident. Hence, impacting their taxability.

Residential Status Calculator
Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
Explore
Residential Status Calculator
Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
Explore

Types of Residential Statuses as per Income Tax Act

  1. Ordinary Resident of India
  2. Resident but Not Ordinary Resident of India (RNOR)
  3. Non-Resident of India (NRI)
Residential Status Flowchart

Primary Conditions:

A person is a resident of India if:

  1. He/She lived in India for 182 days or more during the financial year OR
  2. He/She lived in India for at least 60 days in a financial year and at least 365 days in the last 4 years.

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 the 2nd point above shall be substituted with 182 days. Similarly, it is also applicable to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India.

The Finance Act, 2020, w.e.f., Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in point 2 above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose total income, other than income from foreign sources, exceeds INR 15 Lakhs during the previous year. Income from foreign sources means income that accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).

Individuals not fulfilling any of the above conditions will, hence, be a Non-Resident of India (NRI). The second condition mentioned above will not be applicable in the following cases:

Additional Conditions

If anyone of the primary conditions is satisfied by a person then they are a resident of India. They also need to fulfill the following two conditions to become an Ordinary Resident of India:

  1. The person stayed in India for at least 2 years immediately before the current financial year out of 10 past financial years AND
  2. The person lived in India for at least 730 days immediately before the current financial year out of 7 past financial years.   

A person becomes Not Ordinary Resident of India (RNOR) if they do not fulfill any one of the above conditions.

Budget 2020 introduced changes in Condition of Residential Status. And the same will be applicable from FY 2020-21. Below is our chart for your reference
Tip
Budget 2020 introduced changes in Condition of Residential Status. And the same will be applicable from FY 2020-21. Below is our chart for your reference

Sources of Income and its taxability

 

Source of Income

Ordinary Resident

Not Ordinary Resident

Non-Resident

Income earned in India.

Taxable in India

Taxable in India

Taxable in India

Any income received in India.

Taxable in India

Taxable in India

Taxable in India

Income earned outside India but received in India.

Taxable in India

Taxable in India

Taxable in India

Income earned and received outside India.

Taxable in India

Taxable in India

Not Taxable in India

Any income earned outside India for a business/ profession controlled in/from India.

Taxable in India

Taxable in India

Not Taxable in India

Income earned outside India from any source other than business/ profession controlled from India.

Taxable in India

Not Taxable in India

Not Taxable in India

FAQs

Can the refund be credited to a foreign bank account?

Currently, Refunds can be credited only to a bank account located in India.

How can I e-Verify my returns & Form?

The returns can be e-Verified by logging in to e-Filing account through Net Banking login. However, this facility is available for account holders who have linked their PAN with the account numbers in leading banks in India.

How many types of residential status are there?

There are 3 different types of residential status:

Resident: If a person is in India for at least 182 days during the Financial Year or,
– If a person is in India for at least 60 days during the Financial Year and for at least 365 days during the last 4 Financial Years

Ordinary Resident: A person shall be treated as “Ordinary Resident” if he/she satisfies both the additional conditions:
– If a person is resident of India for any 2 out of last 10 Financial Years, and
– If a person is in India for at least 730 days during the last 7 Financial Years

Not Ordinary Resident: If any of the additional conditions specified above are not satisfied then that person is treated as “Not Ordinary Resident” for that Financial Year

Non-Resident: If none of the basic conditions are satisfied then the person is treated as “Non-Resident” for that Financial Year

Got Questions? Ask Away!

  1. An NRI is an Indian National who does not fulfill the following conditions:

    • lived in India for 120 days during the financial year
    • 60 days or more during the financial year or more than 365 days in last 4 financial years

    Refer the image below