NON RESIDENT INDIANS There are two types of tax payers – resident in India and non resident in India. Indian income is taxable in India whether the person earning such income isresident or non resident.

Determining the residential status of an individual or entity is therefore crucial to understand its taxability

The residential status for the Income Tax Act is determined in section 6 as under:

You are considered an Indian resident for a financial year:

Basic condition (a)	When you are in India for at least 182 days or more during the   previous year OR
Basic condition (b)	You are in India for 60 days or more during the previous year and 365 days or more in the four years immediately preceding the previous year.

Exceptions:

 Basic condition (b) is not taken into consideration in two cases mentioned below that is residential status of an individual shall be determined only on the basis of basic condition (a).

CASE ONE :

 It covers an Indian citizen who leaves India during the previous year for the purpose of employment outside India or an Indian citizen who leaves India during the previous year as a member of crew of an Indian ship.

CASE TWO:

 It covers an Indian citizen or a person of Indian origin who comes on a visit to India during the previous year.

NOTE: – A person is deemed to be of Indian origin if he or either of his parents or any of his grandparents, was born in undivided India. Grand parents include both maternal and paternal grandparents.

In these two cases, an individual will be resident in India only if he satisfies the basic condition of being in India during the relevant previous year for at least 182 days.

Additional conditions:

Additional condition (i)	You are a resident in India in two of the 10 previous years   immediately preceding the relevant FY and
Additional condition(ii)	) You are in India for 729 days or more in the seven years immediately preceding the relevant previous years.

If you do not meet any of the first set of conditions you would be a non-resident in India (NRI).

If you meet the first set of conditions but not the additional conditions, you would be resident but not ordinarily resident (RNOR) in India.

OTHER POINTS:

 Stay at the same place is not necessary. Similarly it is not necessary that the stay should be continuous.

 A stay by an individual on a yacht moored in the territorial waters of India would be treated as his presence in India.

 Where a person is in India only for a part of a day, the calculation of physical presence in India in respect of such broken period should be made on hourly basis . If however data is not available to calculate the period of stay of an individual in India in terms of hours , then the day on which he enters India as well as the day on which he leaves India shall be taken into account as stay of the individual in India.

Rule of residence:

Who is resident and ordinarily resident in India.	He must satisfy at least one of the basic conditions. At the same time, he should also satisfy the two additional conditions.
Who is resident but not ordinarily resident in India.	He must satisfy at least one of the basic conditions. He may satisfy one or none of the additional conditions.
Who is non resident in India.	He satisfies none of the basic condition.