In recent times Government of India has opened the Indian market
and economy to attract more and more foreign capital and technical
know-how. The foreign investors may be Indian Nationals who resided
outside India and other foreign investors including corporations.
A person who resides outside India is technically known as 'non-residents'.
The residential status of an individual does not depend upon the
nationality or domicile of that person but it depends upon his
stay in India during the previous year.
In case of an assessee, other than an individual, the residence
depends upon the place from which its affairs are controlled and
managed. If the control and management of the affairs of a foreign
company is, during the previous year, located wholly in India,
it shall be treated as resident in India. Where part of the control
and management of the affairs of a foreign company is situated
outside India, it shall be treated as non resident company.
Resident and Non Residents :
An individual can be termed as a 'resident' if he stays for the
prescribed period during a fiscal year i.e. 1st April to 31st
March either for--
- 182 days or more, or
- 60 days or more (182 days or more for NRIs) and has been
in India in aggregate for 365 days or more in the previous
four years.
Any
person who does not satisfy these norms is termed as a 'non-resident'.
A resident individual is considered to be 'ordinarily resident'
in any fiscal year if he has been resident in India for nine out
of the previous ten years and, in addition, has been in India
for a total of 730 days or more in the previous seven years. Residents
who do not satisfy these conditions are called individuals 'not
ordinarily resident'. The table below gives the taxability of
the individuals:
