Resident or NRI status query

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  1. Gunjan Kohli

    Gunjan Kohli New Member

    Hi
    I just want some clarification as to what section will be applicable for a person working in a merchant navy field for a Japanese company.
    Last year he has not fulfilled the criteria of being out of India for more than 182 days.
    But he has been a NRI for last 4 years. Will the condition of 60 days or more out of India & 365 days or more in the last 4 years be applicable. Please help.
     
  2. ZED

    ZED Well-Known Member

    6. For the purposes of this Act,—

    (1) An individual is said to be resident in India in any previous year, if he—
    (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or

    (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.


    [Explanation. 1]—In the case of an individual,—

    (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ;


    If the case is covered in the explanation 1 ,cited above, the words "sixty days" shall be replaced by the words "one hundred and eighty-two days" and hence he would not be treated as an ordinary resident.



    S.6(6)A person is said to be "not ordinarily resident" in India in any previous year if such person is—

    (a)an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or......
     
  3. Gunjan

    I assume you're referring to your residential status as for FY 2015-16.

    You have yourself confirmed that you were > 182 days in India for this financial year - this qualifies you as a "Resident" for the year.

    The 60/365 days condition you mentioned is irrelevant in this case as you've already crossed 182 days.

    Now, point of contention is - are you a Resident and Ordinarily Resident (ROR) or Resident and Not Ordinarily Resident (RNOR). This is important because if RNOR, then no problem but if status is ROR, then you need to offer worldwide income to tax for that year.

    You qualify as ROR if you satisfy BOTH of the following conditions:

    You are a resident in min. 2 out of the 10 years preceding the financial year.
    You have been in India for 730 days or more in 7 years preceding the financial year.

    This will need you to sit with your residence data for past 15 years and do some calculation - check out some residence calculators on the internet or consult a CA.

    One more point, if you qualify as ROR, make sure to disclose your foreign bank accounts and other foreign assets in tax return to avoid penalty under Black Money Act.

    Thanks!
     
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