ES साधारण निवासी एवं कर दायित्व

 

Ordinary Resident and Tax Liability Under Income Tax Act, 1961

1. Meaning of Residential Status in Taxation

• Tax liability in India depends on an individual's residential status, not just citizenship.
• Section 6 of the Income Tax Act, 1961 classifies individuals into:
  1. Resident and Ordinarily Resident (ROR)
  2. Resident but Not Ordinarily Resident (RNOR)
  3. Non-Resident (NR)

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2. Ordinary Resident (Resident and Ordinarily Resident - ROR)

A person is considered Ordinarily Resident (ROR) in India if:

A. Basic Conditions (Any One Must Be Fulfilled) - Section 6(1)

✔ Stayed in India for 182 days or more in the relevant financial year.
✔ Stayed in India for 60 days or more in the relevant financial year and 365 days or more in the last 4 years.

B. Additional Conditions (Both Must Be Fulfilled) - Section 6(6)

✔ Has been a Resident in India for at least 2 out of the last 10 years.
✔ Has stayed in India for 730 days or more in the last 7 years.

If both basic and additional conditions are met, the person is an Ordinarily Resident (ROR).

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3. Tax Liability of an Ordinary Resident (ROR) in India

• An **Ordinary Resident (ROR) is liable to pay tax on their global income, meaning:
  ✔ Income earned in India is taxable.
  ✔ Income earned outside India is also taxable in India.

Examples:

✔ Salary received in India from an Indian or foreign company (Taxable).
✔ Salary received abroad but deposited in an Indian bank (Taxable).
✔ Rental income from a house in India (Taxable).
✔ Rental income from a house in the USA (Taxable).

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4. Comparison of Tax Liability Based on Residential Status

Type of Income	Resident and Ordinarily Resident (ROR)	Resident but Not Ordinarily Resident (RNOR)	Non-Resident (NR)
Income earned in India	✅ Taxable	✅ Taxable	✅ Taxable
Income earned outside India	✅ Taxable	❌ Not Taxable (Unless from Indian business/profession)	❌ Not Taxable
Income from foreign business controlled from India	✅ Taxable	✅ Taxable	❌ Not Taxable

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5. Conclusion

• A Resident and Ordinarily Resident (ROR) is taxed on worldwide income in India.
• Understanding residential status is crucial for expats, NRIs, and Indian citizens working abroad to determine their tax liability in India.