The scope of taxation under income tax act depends on the residential status of the assessee. Residential status is completely determined on the basis of presence of assessee in India during the previous year. The residential status is determined every year because a person can be resident in one year and non-resident in other year. The residential status is determined on the following basis:-


(a) Individual:- an individual is a resident in India if the following conditions are fulfilled:-

Condition (i) Stays in India for 182 days or more in a previous year or

Condition (ii) Stayed in India for 365 days or more during the four preceding years and stays in India for at least 60 days during the previous year (182 days in case of an Indian citizen or a person of Indian origin coming on a visit to India or in case of an Indian citizen going abroad as a member of the crew of an India ship or for employment). Please note that the stay in India may be continuous or intermittent.

(b) HUF or Firm or AOP:- Hindu Undivided Family or Firm or other Association of Persons is resident of India in any previous year except where the control and management of its affair is wholly situated outside India in that previous year. Even where the control and management is partly in India, the HUF, firm or AOP, as the case may be, shall be treated as resident.

(c) Company:- (i) if it is an Indian company or

(ii) During the previous year its control and management is situated wholly in India. Control and management of a company ordinarily refers to the seat of its directors. In this case a point must be noted that even where the control and management partly done outside India the company shall be treated as non-resident .


 A person is non-resident if he is not resident in India.


An individual who, or an HUF whose manager, (a) has been a non-resident in India in nine out of the ten previous years preceding the relevant previous year, or (b) has been in India for an aggregate period of 729 days or less during the seven previous years preceding that year, would be regarded as person not ordinarily resident in India.