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RESIDENTIAL
STATUS
&
INCIDENCE OF
TAX
RELEVANCE OF RESIDENTIAL
STATUS
THE TWO TYPES OF TAX PAYERS
RESIDENT IN INDIA: NON-RESIDENT IN INDIA:
• Indian income is taxable. • Indian income is taxable.

• Foreign income is taxable. • Foreign income is not
taxable.
DIFFERENT TAXABLE ENTITIES
The following norms one has to keep in mind while deciding residential status of an
assessee :
Different taxable entities - All taxable entities are divided in the following categories
for the purpose of determining residential status:
a. an individual ;
b. a Hindu undivided family ;
C. a firm or an association of persons ;
d. a joint stock company; and
e. every other person.
RESIDENT OR NON-RESIDENT?
Category Individual and HUF Firm, AOP, JSC and
Every Other Person
1. Resident in India: Resident in India
Ordinarily Resident
Or
Not Ordinarily
Resident
2. Non-resident in India Non-resident in India
RESIDENTIAL STATUS
HOW TO DETERMINE RESIDENTIAL STATUS?
Under SECTION 6(i) an individual is said to be resident in India

in any previous year, if he satisfies at least one of the
following basic conditions.
RESIDENTIAL STATUS
Basic conditions
If a person stays for more Incase if a person fails to fulfil the

than 182 days during the conditions of 6(i)a then 2 simultaneous
relevant previous year, they conditions need to be satisfied under
are considered to be a section 6(i)c :
resident 1. He/She has to stay for more than
Under section 6(i)a 60 days in previous year 2023-24.
2. He/She must stay for a total of
365+ days in the past 4 previous
years
Exceptions to section 6(i)c
• If a person, who is an Indian citizen, leaves India for employment

outside India is exempted from section 6(i)c.
• An Indian citizen who leaves India during the previous year as a

crew member of an Indian ship.
• An Indian citizen or a person of Indian origin who comes to India for

visiting purpose for him only 6(i)c is not applicable.
RESIDENTIAL STATUS
CLASSIFICATION
• Resident and Ordinarily Resident: A person is said to be an ROR if he has been a resident of
India for any of the 2 previous years out of 10 preceding previous years of relevant previous year 2023-
24.He also needs to stay in India for at least 730 days in 7 preceding years of the relevant previous
years.
• Resident but Not Ordinarily Resident: If a resident is unable to fulfil both the conditions of section
6(6) he is considered to be an RNOR
• Non Resident: If a person does not satisfy any of the conditions under section 6(i)a or 6(i)c he is said
to be a NR.
DEEMED RESIDENT
CONDITIONS TO BE SATISFIED IN ORDER TO BE A DEEMED
RESIDENT:
• Person must be an Indian citizen.
• Total Income of the person excluding foreign sources must exceed INR
15,00,000.
• The person must not be a resident under section 6 (I).
• The person must not be liable to pay tax in any other country by reason
of domicile/residence/any other criteria of similar nature.
WHAT IS THE RESIDENTIAL STATUS OF A DEEMED RESIDENT?
By default, a person who is a Deemed

Resident, cannot be ordinarily resident.
Therefore, they are "not ordinarily
residents".
INCIDENCE OF TAX
Incidence of Tax or Tax incidence is an economic
term for understanding the division of a tax burden
between stakeholders, such as buyers and sellers or
producers and consumers.
Who bears the incidence of tax when:-
INCOME ORDINARILY NON NON

RESIDENT ORDINARILY RESIDENT
(ROR) RESIDENT (NR)
(RNOR)
SOURCE RECEIPT
IN INDIA IN INDIA TAXABLE TAXABLE TAXABLE
IN INDIA OUTSIDE INDIA TAXABLE TAXABLE TAXABLE
OUTSIDE INDIA IN INDIA TAXABLE TAXABLE TAXABLE

WHEN THE SOURCE AND RECEIPT
BOTH ARE OUTSIDE INDIA
PLACE OF ORDINARILY NON NON RESIDENT
CONTROL RESIDENT ORDINARILY (NR)
(ROR) RESIDENT
(RNOR)
CONTROL WITHIN TAXABLE TAXABLE NOT-TAXABLE
INDIA (PGBP)
CONTROL OUTSIDE TAXABLE NOT-TAXABLE NOT-TAXABLE
INDIA (PGBP)
OTHER THAN TAXABLE NOT-TAXABLE NOT-TAXABLE
PGBP
CONCLUSIONS
Indian Income: Indian income is always taxable
irrespective of the residential status of the
taxpayer
Foreign Income: Foreign Income is taxable in the

hands of ordinarily or not ordinarily residents. It is
not taxable in the hands of non-residents.
THANK YOU!
Group 2
(109-134)

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RESIDENTIAL

RESIDENT IN INDIA: NON-RESIDENT IN INDIA:

• Indian income is taxable. • Indian income is taxable.

Under SECTION 6(i) an individual is said to be resident in India

If a person stays for more Incase if a person fails to fulfil the

• If a person, who is an Indian citizen, leaves India for employment

• An Indian citizen who leaves India during the previous year as a

• An Indian citizen or a person of Indian origin who comes to India for

• The person must not be a resident under section 6 (I).

By default, a person who is a Deemed

INCOME ORDINARILY NON NON

IN INDIA OUTSIDE INDIA TAXABLE TAXABLE TAXABLE

OUTSIDE INDIA IN INDIA TAXABLE TAXABLE TAXABLE

Foreign Income: Foreign Income is taxable in the

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