To identify how much tax you are liable to pay in India, it is important to identify what your residential status is.

Your residential status can change from one financial year to the next. So, if you are non-resident for one year, for the next year and thereafter you must check your status again if you’ve travelled or changed homes etc.

Also, it is important to keep in mind that your residential status as per RBI rules may be different as compared to the residential status as per the Income Tax Act.

For the purpose of income tax in India, a person can be classified as a:

• Resident
• Resident not ordinarily resident (RNOR)
• Non-resident Indian (NRI)

WHO IS A RESIDENT IN INDIA?

You would qualify as a resident of India if you satisfy one of the following two conditions

Stay in India for 182 days* or more during the financial year or

Stay in India for at least 365 days* during the 4 years preceding that year AND at least 60 days* in that year.

*These days could be part of a single visit or counted over many visits to India.

WHAT HAPPENS IF YOUR JOB TAKES YOU OUT OF THE COUNTRY?

If you take up a job outside India, the 60-day minimum requirement will increase to 182 days.

So, if you are an Indian citizen or a person of Indian Origin, and you live outside India the 60-day minimum period will increase to 182 days.

From the financial year 2020-21, Indians who have total income (from other than foreign sources) of over Rs 15 lakh during a financial year are considered to be of deemed residential status in that year if they are not a tax resident of any other country.

WHO IS AN RNOR?

You will be considered Resident but Not Ordinarily Resident (RNOR) for the year if you satisfy one of the two conditions for a Resident, and also

If you have been an NRI in 9 out of 10 financial years preceding the year.

OR

During the past 7 financial years, have been in India for a period of 729 days or less.

WHO IS A NON-RESIDENT IN INDIA?

If you neither satisfy the conditions for resident nor RNOR, you will be considered an NRI for the year.