Determine Resident and Ordinarily Resident/ Resident but Not Ordinarily Resident
To determine the Residential Status of Individual first we have to:
1.Check whether he is resident or Non- Resident ( For determining whether an individual is resident or non – resident read this)
2. If he is resident then we need to further check whether he is ordinarily resident or not ordinarily resident.
Only individual and HUF can be resident but not ordinarily resident in India. All other types of the assessee can be either a resident or non- resident.
Resident and Ordinarily Resident
An individual is said to be a resident and ordinarily resident if he satisfies both the following conditions:
1. He is a resident in any 2 out of last 10 years preceding the relevant previous year,
AND
2. His total stay in India in the last 7 years preceding the relevant previous year is 730 days or more.
Resident but Not Ordinarily Resident
If the individual satisfies both the conditions mentioned above, then he is a resident and ordinarily resident but if only one or none of the conditions are satisfied, the individual is a resident but not ordinarily resident.
1. The term “stay in India” includes in the territorial water of India (i.e. 12 nautical miles into the sea from the Indian coastline). Even the stay in a ship or boat moored in territorial waters of India would be sufficient to make the individual in India.
2. It is not necessary that the period of stay must be continuous or active nor the stay must be the usual place of residence, business, or employment of the individual.
3. For counting of a number of days stayed in India, both the date of departure, as well as the date of arrival, are considered to be in India.
4. The residence of an individual for the income-tax purposes has nothing to do with citizenship, place of birth, or domicile. An individual can, therefore, be resident in more countries than one even though he can have only one domicile.
