If you want to know what is residential status in income tax, then I am here to give you the answer. Residential status refers to an individual’s status in accordance with the question of how long he or she has stayed in India for the past five years. The Income Tax liability depends on the residential status in the financial year and four former years before the financial year. As per the Income Tax Act of 1961, the residential status of an individual is an important factor in determining the tax implications.Into how many divisions can Residential Status be Categorised?After knowing what is the meaning of residential status in income tax, you must also know the types of it. Residential Status is divided into 3 types which are as follows:
Resident and Ordinarily Resident (ROR)
Resident but Not Ordinarily Resident
Non- Resident
How to know whether you are a resident of India or not?There are two conditions out of which, if you are able to meet one, then be sure, you fulfil the criteria for being resident.The two terms are as follows:
Living in India for 182 days or more in a fiscal year
Living in India for the immediately 4 preceding years is 365 days or more and 60 days or more in a financial year
I see you want to know about income tax residential status. Here is your answer. Residential status determines how an individual's income is taxed in the country. It is assessed for each financial year (April 1 to March 31). It depends on the individual's physical presence in India during that period. The three main categories of residential status are:
Resident:
An individual is considered a resident if they are in India for 182 days or more in the financial year.
Non-Resident:
An individual is considered a non-resident if they are in India for fewer than 182 days in the financial year.
Resident but Not Ordinarily Resident (RNOR):
An individual is ordinarily resident if they have been resident in India for at least 2 out of the 10 years preceding the relevant financial year. They have been in India for at least 730 days during the 7 years preceding the relevant financial year.
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What is Residential Status in Income Tax?
Rima
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April 12, 2022
2022-04-12T19:10:08+00:00 2024-01-02T15:55:10+00:00Comment
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