Whether a person is taxable in India for any given financial year depends on his residency status there. The phrase “residential status” was created by the Indian income tax regulations and should not be confused with a person’s Indian citizenship. A person who is an Indian citizen may find themselves a non-resident for a given year. Similar to this, a foreign national could find themselves considered an Indian resident for the duration of a certain tax year. It’s also important to remember that different categories of people—such as individuals, firms, companies, etc.—have distinct criteria used to define their residential status.
How can I tell if I’m a resident or not?
The income tax regulations in India categorise the following individuals as taxable for income tax purposes:
a resident who does not often reside (RNOR)
not a resident (NR)
Each of the aforementioned tax payer types has a different taxability. Let’s first examine how a taxpayer becomes a resident, an RNOR, or an NR before discussing taxability.
If a taxpayer meets either of the following two criteria, he would be considered an Indian resident:
1. Spend 182 or more days in India during a 12-month period;
2. You must have spent at least 365 days in India during the last four years and at least 60 days within the current fiscal year.
If a person of Indian descent or a citizen of India leaves the country for work within a fiscal year, they will only be considered residents of India if they stay for at least 182 days. Such people are permitted to stay in India for a period longer than 60 days but less than 182 days.