RESIDENTIAL STATUS (SECTION 6)

RESIDENTIAL STATUS [SECTION 6]

The incidence of tax on any assessee depends upon his residential status under the Act. For
all purposes of income-tax, taxpayers are classified into three broad categories on the basis of
their residential status viz.

(1) Resident and ordinarily resident

(2) Resident but not ordinarily resident

(3) Non-resident

The residential status of an assessee must be ascertained with reference to each previous
year. A person who is resident and ordinarily resident in one year may become non -resident
or resident but not ordinarily resident in another year or vice versa.

The provisions for determining the residential status of assessees are:
(1) Residential status of Individuals
Under section 6(1), an individual is said to be resident in India in any previous year, if he
satisfies any one of the following conditions:

(i) He has been in India during the previous year for a total period of 182 days or more, or

(ii) He has been in India during the 4 years immediately preceding the previous year for a total
period of 365 days or more and has been in India for at least 60 days in the previous year.

Exceptions:
The following categories of individuals will be treated as residents only if the period of their
stay during the relevant previous year amounts to 182 days. In other words even if such
persons were in India for 365 days during the 4 preceding years and 60 days in the relevant
previous year, they will not be treated as resident.

(i) Indian citizens, who leave India in any previous year as a member of the crew of an Indian
ship or for purposes of employment outside India, or

(ii) Indian citizen or person of Indian origin1 engaged outside India in an employment or a
business or profession or in any other vocation, who comes on a visit to India in any
previous year