Residential Status (Section 6) of the Income Tax Act, 1961

 The basis of charging income tax is the taxable income of every person. To determine taxable income, it is essential to find out residential status of the person and scope of total income. There are two types of taxpayers from residential point of view – Resident in India and Non-resident in India. Indian income is taxable in India whether the person earning income is resident or non resident. Conversely, foreign income of a person is taxable in India only if such person is resident in India. Foreign income of a non-resident is not taxable in India. Therefore, the tax liability of a person is dependent upon the residential status of a person.



According to the residential status, the assessee can either be;

 Resident in India, or

 Non-resident in India

However, a resident individual and a resident HUF can further be classified as:

 Resident and Ordinarily resident in India (ROR) or

 Resident but not Ordinarily resident in India (RNOR).


It must be noted that only an individual or a HUF can be resident, not ordinarily resident or non resident in India. All other assesses can be either resident or non-resident in India but cannot be not ordinarily resident in the matter of their residential status for all purposes of income tax. Section 6 of the Income-tax Act prescribes the conditions to be fulfilled by various taxpayers to determine their residential status.



An individual first needs to satisfy basics condition in order to become resident in India. If a resident individual satisfies additional conditions, he becomes resident and ordinarily resident (ROR), otherwise he is resident but not ordinarily resident (RNOR).


Under Section 6(1) of the Income-tax Act, an individual is said to be resident in India in any previous year if he:

1. he has been in India for at least 182 days during the previous year; or,

2. he has been in India for at least sixty days (60 days) during the previous year and for at least three hundred and sixty-five days (365 days) during the four years immediately preceding the previous year.

Exceptions to above conditions

In the following two cases, second condition is not applicable, i.e., if condition (1) is satisfied then an individual is resident otherwise he will be non-resident:

i. the individual is a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship, or for the purpose of employment outside India, or

ii. the individual is a citizen of India or person of Indian origin engaged outside India (whether for rendering service outside or not) and who comes on a visit to India in the any previous year.

Therefore, in the above two exceptional cases, only the basic condition 1 needs to be checked. If it is satisfied, then the individual is treated as a resident, otherwise he will be treated as non resident.


If an individual does not satisfy any of the above two basic conditions then, he will be treated as non-resident.

It must be noted that the fulfilment of any one of the above conditions 1 or 2 will make an individual resident in India since both these conditions are alternative and not cumulative in their application


An individual may become a resident and ordinarily resident in India if he satisfies both the following conditions given u/s 6(1) besides satisfying any one of the above mentioned conditions:

1. he is a resident in atleast any two out of the ten previous years immediately preceding the relevant previous year, and

2. he has been in India for 730 days or more during the seven previous years immediately preceding the relevant previous year.



If a resident individual is not able to satisfy both the additional conditions, then he will be resident but not ordinary resident (RNOR).

Important Points to be considered while determining Residential Status:

The residential status of the assessee should be determined for each year separately. This is because a person resident in one year may become non-resident or not ordinarily resident in another year and vice versa.

1. The residential status of an individual for tax purposes does not depend upon his citizenship, nationality and place of birth or domicile. This is because for tax purposes, an individual may be resident in more than one country in respect of the same year.

2. The period of stay required in each of the conditions need not necessarily be continuous nor is the purpose of stay is insignificant in determining the residential status.

3. It is not required that the stay should be at the usual place of residence, business or employment of the individual. The stay may be anywhere in India and for any length of time at each place.

4. India means territory of India, its territorial waters, continental shelf, Exclusive Economic Zone (upto 200 nautical miles) and airspace above its territory and territorial waters.

5. Where the exact arrival and departure time is not available then the day he comes to India and the day he leaves India is counted as stay in India.