Determining the residential status is essential during the time of income tax filing. There are different taxable incomes and some exceptions regarding the residential status in India.
Section 6 (1) of the Income Tax Act, 1961, offers two sets of parameters to determine whether a particular person is an Indian citizen or not. If the said individual falls under any one of the following criterias, he/she will be a resident of the country. These are:
Meeting with the above mentioned parameters qualifies an individual as a resident of the country, however, in order to become an ordinary citizen of the country, one has to meet with the following standards:
Any salaried or self-employed individual residing in India will be subjected to the age-old Income Tax based on their residential status. At the time of Income Tax return filing, it is very important to determine the residential status of a person, since it is the most important component in the realm of taxation.
Multiple taxpayers are subjected to a wide range of taxable incomes. Let us look at them in detail with the help of the following table:
Details and Particulars | Ordinary Resident and Resident | A non-ordinary resident | NRI |
If the income is received in India, irrespective of whether it has its source in India or not | Yes | Yes | Yes |
Income ensuing in India or is expected to ensue in India during the relevant financial year, irrespective of whether it has its source in India or not | Yes | Yes | Yes |
If an individual is receiving his income anywhere outside India, but the business is being handled from India | Yes | Yes | No |
Income ensuing outside India and received in the same place in the relevant financial year from other sources | Yes | No | No |
Two exceptions to the general rule can be applied here:
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
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