Figuring out the residential status of an individual is important for the Income tax department. It helps them to put the individuals in the right tax slabs. I will let you know how to determine residential status of an individual in my answer. I hope this will help you.
How to determine the residential status of an individual?From among different categories of Indians, the Income Tax Department compartmentalises individuals as residents, non-residents and a resident not ordinarily resident.
Here is what it means:
A resident Indian stays in India for a minimum of 182 days. He/she stays in India for preceding 4 years in 365 days or more and 60 days or more in the said financial year
A resident Indian with the total income of Rs. 15 lakhs or more (other than foreign income) is considered a resident Indian if he/she stays in India for a minimum of 120 days.
An individual can get status of deemed to be Indian resident if their income exceeds Rs. 15 lakhs and they are not liable to pay taxes in any other country.
A resident Indian is charged income tax for income from across the globe
A resident not ordinarily resident is an individual who was a resident of India in at least 2 out of 10 preceding years. Such individuals are considered RNOR if they have stayed for 730 days in India for preceding 7 years.
When an individual doesn’t belong to either resident or resident not ordinarily resident category then they are termed as Non Residents.
The tax liability for both RNOR and NR is limited to income they earn in India.
I hope this clarifies how to determine residential status of an individual.
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How to determine residential status of an individual?
Tarun
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2022-03-21T14:22:58+00:00 2022-03-22T10:20:24+00:00Comment
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