An individual may be (a) residential and ordinarily residential (b) residential but not ordinarily residential or (c) non – residential.
5.1 Residential and ordinarily residential – To find out whether an individual is Resident and ordinary resident ‘’ in India, one has to proceed as follows—
Step 1 First find out whether such individual is ‘’resident ‘’in India.
Step 2 -if such individual is ‘’resident ‘’in India, then find out whether he is ‘’ordinary resident ‘’in India [see Para 5.1-2]
5.1-1 BASIC CONDITIONS TO TEST AS TO WHEN AN INDIVIDUAL IS RESIDENT IN INDIA – Under Section 6(1) individual is said to be resident in India in any previous year, if he satisfies at least one of the following basic conditions—-
a. he is in India in the previous year for a period of 182 days or more; or
b. he is in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.
5.1-1a EXCEPTION – The aforesaid rule of resident is subject to the following exception —-
Exception one – By virtue of Exception 1(a) to section 6(1) the period of day ‘’60 days ‘’referred to in (b) above has been extended as follows —-
| Assessment years | Who can take the benefit of extended period | Extended period |
| 1990-91 onwards | An Indian citizen who can 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 the crew of an Indian ship | 182 days |
For this purpose, the requirement is not leaving India for talking employment outside India but leaving India for the purpose of Employment (the employment may be in India or may be outside India). to put it differently, the individual need not be an unemployed person . He may be employed in India and during the previous year on a foreign assignment of his employer company. alternative, he may be an unemployed person who goes outside India to take an employed outside India.
Exception two – BY virtue of Exception 1 (b), the period of ‘’60 days’’ referred to in (b) above has been extended as follows in the case of a person who comes on visit to India —-
| Assessment year | Who can the benefit of extended period | Extended period |
| 1995-96 onwards 1990-91 to 1994-95 | Indian citizen or a person of India origin Indian citizen or a person of India origin | 182 days 150 days |
A person is deemed to be Indian origin if he, or either of his parents or any of his grand – parents, was born in undivided India.
Exception three – Exception three is given by section 6(1). it is applicable from the assessment year 2021-22.for the provision of this section, see para 5.3-1.
5.1-2 ADDITIONAL CONDITONS TO TEST WHEN A RESIDENT INDIVIUAL IS ORDINARIYL RESIDENT IN INDIA
Under section 6(6), a resident individual is treated as ‘’resident and ordinarily resident’’ in India if he satisfies the following additional condition
i . He has been resident in India in at least 2 out of 10 previous Year immediately preceding the relevant previous year; and
ii . He has been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year.
Exception – for a few exceptions, see para 5.3-1.
5.2 Resident but not ordinarily resident – An individual who satisfies one or more of the basic conditions laid down in section 6(1), but does not satisfy the two additional Condition laid down in section 6(2) is treated as resident but not ordinarily resident in India.
Exception – for a few exceptions, see para 5.3-1.
5.3 Non – resident – An individual is a non-resident in India during the previous year if he satisfies none of the basic condition laid down in section 6(1) [see para 5.1-1].
5.3-1 Exception – Even if an individual satisfies none of the two basic conditions, he is deemed to be resident but not ordinarily resident in the cases given below—
First exception – This exception is given under section 6(1A) read with section 6(6)(d) and applicable from the assessment year 2021-22. Under this exception an individual shall be deemed to be resident but not ordinarily resident in India, if he satisfies the following 4 condition—
a. he is an Indian citizen;
b. his total income (other than the income from foreign sources) exceeds Rs.15,00,0004 during the relevant previous year;
c. he is not liable to tax in any other country or territory by reason of his domicile or resident or any other criteria of similar nature, and
d. he is not resident in India within the parameters of section 6(1).
This exception is not applicable in the case of a foreign citizen, even if he is a person of Indian origin.
Second exception – This exception is given by section 6(6)(c) read with Exception 1(b) to section 6(1) and applicable from the assessment year 2021-22. under this exception, an individual shall be deemed to be resident but not ordinarily resident in India if he satisfies the following 4 conditions—
a. he is an Indian citizen or a person of Indian origin;
b. his total income (other than the income from foreign sources) exceeds Rs.15,00,0004 during the relevant previous year;
c. he come to India on a visit during the relevant previous year; and
d. he is in India for 120 days (or more but less than 182 days) during the relevant previous year and 365 days (or more) during 4 years immediately preceding the relevant previous year.