As per the IT Rules, an individual becomes a NRI if he satisfies both the understated conditions:
- He is not in India for 182 days or more during the relevant previous year, and
- He is not in India for 60 days or more during the relevant previous year and he is not in India for 365 days or more during the 4 years prior to the previous year.
In case where a person leaves for employment or where an Indian Citizen who is abroad comes to India for a visit, the period of stay would be 182 days instead of 60 days in the previous year as per point 2 above.
To fully understand this rule, I am taking help of an example:
Say, Mr.XYZ left India (not for employment) on June 06, 2014 after living in India continuously for 4 years, 2 months, and 5 days.
1. What is his resident status for FY 2014-15?
Say, Mr.XYZ wants to be an Indian resident in filing tax for FY 2015-16 and FY 2016-17
2. What is the minimum stay (in days) that is required of him in FY 2015-16 and FY 2016-17? Does the stay need to be continuous or can there be breaks in between?
3. How would the day calculations change if Mr.XYZ in the example above had left for employment purposes?
4. Is there any other law other than the IT Act that is applicable to determine the residency status?
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