Tax assessees may be resident or non-resident. Residents are further subdivided into two sub-categories - (a) resident and ordinarily resident, and (b) resident but not ordinarily resident. To determine which category you fall into, apply the following tests to the tax year from April 1 to March 31.
Resident
A Resident is one who falls into either of these two categories:
- Is in India for 182 days in the year or more, OR
- In the preceding four years was in India for 365 days or more, and in the current tax year is in India for a total of 60 days or more
This applies to citizens of any nationality. However the period of 60 days in the second clause above will be extended to 182 days (for Indian citizens and foreign citizens of Indian origin) for those who fall into one of these two categories:
- an Indian citizen who left India in any year for employment outside India, OR
- an Indian citizen or a foreign citizen of Indian origin (NRI), who is outside India, comes on a visit to India
Non-ResidentA tax assessee is non-resident if he or she is not a Resident as-per the section above.
Resident but Not Ordinarily Resident
A Resident is "not Ordinarily Resident" if he or she fulfils either of these two conditions:
- Has been a Non-Resident in India for 9 out of 10 preceding years, OR
- During the 7 preceding years been in India for a total of 729 days or less
Tax Liability on Indian Income and Foreign Income
| | Resident & Ordinary Resident | Resident & Not Ordinary Resident | Non Resident |
| Indian Income | | | |
| Income received or deemed to be received in India during the current financial year | Taxable | Taxable | Taxable |
| Income accruing for arising or deemed to accrue or arise in India during the current financial year | Taxable | Taxable | Taxable |
| Income accruing or arising or deemed to accrue or arise outside India, but first receipt is in India during the current financial year | Taxable | Taxable | Taxable |
| Foreign Income | | | |
| Income accruing or arising or deemed to accrue or arise outside India, but first receipt is outside India, during the current financial year | Taxable | Not taxable | Not taxable |
| Income accruing or arising outside India from a Business / Profession controlled from India during the current financial year | Taxable | Taxable | Not taxable |
| Income accruing or arising outside India from any source other than Business / Profession controlled from India | Taxable | Not taxable | Not taxable |
