definition of visit under explanation 6(1) of the I. T Act

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HARINDER (Querist)
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19 January 2009
Hi can anyone help me out..

Mr X a citizen of India, was employed in UK and 'visited'for 2 months for not employment purpose but for personal purpose.

Later in the FY, he was deployed in India
for 6- 7 weeks as a part of employment.

Please can you help me whether he will be covered under the explanation 6(1)of the Indian Income Tax Act `1961

If we count the no of days in India for personal visits then he will be resident if Explantion 6(1) of the Act

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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19 January 2009 RESIDENTIAL STATUS OF AN INDIVIDUAL

For determining the Residential Status of an Individual one has to pass the litmus test of two broad situations, First is the testing of two Basic Conditions, and Second is the testing of other two Additional Conditions.

BASIC CONDITIONS:

Basic Condition (a)

He is in India in the previous year for a period of 182 days or more.

Basic Condition (b)

He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.

The above period of 60 days gets extended to 182 days in the following three situations:

1) If you being an Indian Citizen leave India during the previous year for the purpose of employment outside India; or,

2) If you being an Indian Citizen leave India during the previous year as a member of the crew member of an Indian Ship.

3) If you being an Indian Citizen or a Person of Indian Origin come to visit India during the previous year.

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So if any Individual/ HUF satisfies at least one of two basic conditions subject above exemptions he gets qualified for the second round of tests i.e., testing of two additional conditions.

However if does not pass any of the two conditions specified above his Residential Status will qualify to be of a ‘Non Resident’

ADDITIONAL CONDITIONS:

Additional Condition (a)

He has been “resident” in India in at least 2 out of 10 previous years immediately preceding the relevant previous year.

Additional Condition (b)

He has been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year.

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Here you must note that unlike testing of the two basic conditions as mentioned above here the Individual has to satisfy both the conditions simultaneously to qualify him/ herself as a ‘Resident and Ordinarily Resident’ (abbreviated as ROR)
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However if an Individual is able to satisfy either none or only one of the two additional conditions specified above he qualifies himself as a ‘Resident but not Ordinarily Resident’ (abbreviated as RNOR).