The question “What is my residential status in a particular year?” is one of the most frequently asked questions from people who are living outside of India. The definition of non-resident and resident has undergone changes, and people need to know how they can calculate their status for the year. In this article, we will explain how you can determine your residential status from the income tax perspective using section 6 of the Income Tax Act.
Don’t let reading hold you back, Watch our video instead
Before we dive in, allow us to introduce ourselves. We are AKT Associate, a team of chartered accountants who specialize in tax litigation, FEMA compliances, and international taxation. We receive many questions from non-resident Indians (NRIs) on how to calculate their residential status for income tax purposes. This is the most commonly asked question we receive, and we are here to help.
First, we would like to encourage you to check out our YouTube channel, where we have created a lot of FAQs on NRI topics. We have created playlists covering topics such as NRI TDS properties FAQs, Merchant Navy sailors, and income tax notices FAQs. We have provided answers to most of the questions we receive. You may find your answer there without having to pay a consulting fee. However, if you cannot find your answer, please contact our team to schedule an appointment.
Consult CA Arun Tiwari for more info at 📞 8080088288 or cs@aktassociates.com
Now, let’s get back to the main topic of this article – calculating your residential status. The Finance Act 2023 has made some changes to the rules, which can create confusion. We will guide you through the process so that you can calculate your status yourself.
To calculate your residential status, we will be using Section 6 of the Income Tax Act, which governs residential status. This section talks about residence in India and the conditions for determining whether an individual is a resident or non-resident. If you fulfill the conditions, you are a resident; if you do not fulfill them, you are a non-resident.
Here are the conditions for determining NRI status for the previous year:
- If you have been in India for 182 days or more in the previous year, you are a resident.
- If you have been in India for 60 days or more in the previous year and have been in India for 365 days or more in the preceding four years, you are a resident.
- If you are a citizen of India who has left India in the previous year for employment or any other purpose, you are a non-resident.
- If you are a citizen of India who has left India in the previous year as a crew member on an Indian ship or for employment on a foreign ship, you are a non-resident.
- If you are not a citizen of India and have come to India for employment or any other purpose, you are a non-resident.
Remember, we are looking at these conditions in a negative sense. In other words, if you do not meet any of these conditions, you are a non-resident.
Conclusion
Calculating your NRI status is crucial for tax purposes. By following the guidelines stated in section 6 of the Income Tax Act, you can easily calculate your NRI status. It is advisable to seek professional help if you have any doubts about how to Calculate Your NRI Status.