Q5. Who is resident as per Income Tax Act definition?

The Income Tax Act of 1961 defines a resident as follows..

  • A person is a resident who has stayed equal to more than 182 days of current financial year in India OR
  • if he stayed in India for 60 days or more in previous financial year and 365 days or more in four years before that financial year under consideration.

Exceptions to the above:

The 60-day period mentioned above will be substituted for 182 days in case of the following persons:-

  • A citizen of India who leaves the country as a crew member of an Indian ship or for the purposes of employment outside India.

If you satisfy either of above definition, then you’re an Ordinary resident of India for that financial year and must pay taxes in India. As per Section 6 of the Income Tax Act, If you don’t satisfy above conditions for a resident, then you’re an NRI- Non Resident Indian.