An Indian Citizen who stays abroad for employment/ carrying on business or vacation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. ( persons posted in U.N. organisations and officials deputed abroad by Central/ State Government and Public Sector Undertakings on temporary assignments are also treated as non-resident) Non-resident foreign citizens of Indian Origin are treated on par with non-resident indian citizens.
A foreign citizen ( other than a citizen of Pakistan or Bangladesh ) is deemed to be of Indian Origin, if,
Note: A spouse ( not being a citizen of Pakistan or Bangladesh ) of an Indian Citizen or of a person of Indian Origin is also treated as a person of Indian origin for the above purpose.
B. For Investment in immovable properties:
A foreign citizen ( other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri lanka or Nepal ), is deemed to be of Indian origin if,
(i) he held an Indian passport at any time, OR
Overseas Corporate Bodies predominantly owned by Individuals of Indian
Nationality and origin resident outside India (OCBs) include overseas
Companies, partnership firms, societies and other corporate bodies which
are owned, directly or indirectly to the extent of atleast 60% by individuals
of Indian Nationality or Indian Origin resident outside India as also
overseas trusts in which atleast 60% of the beneficial interest is irrevocably
held by such persons. Such ownership interest should be actually held
by them and not in the capacity as nominees.
Liability to pay tax in India does not depend on the nationality or domicile of the Tax payer but on his residential status.
Residential Status is determined on the basis of physical presence i.e. the number of days of stay in India in any year.
(i) he stayed in India for 182 days or more during
the previous year, or
(c) A company is resident in India if-
A person is non-resident if he is not resident in India.
An individual or an HUF is treated to be not ordinarily resident in India in any previous year if he or the manager of HUF-
Such a person is resident in India if he satisfies the following conditions:
Such person would be non-resident if he does not satisfy condition (a) stated above.
The residential status of such a person is to be determined after looking into the following
The person would be resident in India if he satisfies all the conditions (a) to (c) above.
The person would be resident but not ordinarily resident if he satisfies the condition at (a) but does not satisfy any or either of the conditions at (b) and (c) above.
The person would be non-resident if he does not satisfy the condition at 9a) above.
Thus condition (a) is of fundamental importance and must be satisfied to be resident in india. Conditions ( b) and (c) only help to qualify that resident status.
For individuals other than those included in category ( I ) or (ii), we have to look into the following four conditions to determine the residential status:
A person would be resident in India if he satisfies any of the conditions at (a) or (b) and both the conditions at (c) and (d) i.e. he either satisfies conditions (a) , (c) and (d) or (b), (c) and (d).
A person would be resident but not ordinarily resident if he satisfies either of the conditions at (a) or (b) and does not satisfy both or either of the conditions at (c) and (d). In other words, if a person satisfies condition (a) or (b) only but does not satisfy either (c) or (d) or both, he would be treated as resident but not ordinarily resident in India.
If a person satisfies neither of the conditions (a) or (b) , he is non-resident.