Residential Status

An individual is considered resident in India if he is in India in tax year for:

• 182 days or more
• 60 days or more where the period of 60 days stands changed to 182 days or more for – Indian citizens/persons of Indian origins on visit to India
• For citizens of India leaving India for employment abroad as members of crew of Indian ship during tax year

A resident is "not ordinarily resident" in India in any tax year if he:

• Has been "non-resident" in India in nine out of 10 previous years preceding that year
• Has during previous seven years, preceding that year been in India for total period of 729 days/less
• Income is categorized under five broad heads/classes where the taxable component of income is ascertained as per the rules for particular head/class of income followed by aggregation for determining total taxable income. These include:
• Salaries – Received against services rendered and include wages, pension, fees, commission and taxable value of perquisites
• Income from house properties that comprise income that arises from use of residential/commercial properties. Here, only two prescribed deductions are permitted while computing income.
• Profits and Gains from Business/Profession that covers income earned from business/profession that is net of permissible deductions, against revenue earned.
• Capital Gains that covers gains which arise from transfer of capital assets and the period of holding determining classification of asset, which then determines manner of taxation. The gains comprise short-term assets and long-term capital assets.
• Income from Other Sources that are residuary head/class of income covering any income not specifically dealt with under other heads.