Benefit to Non- Residents under Income Tax Act,1961

1. Who is a Non-Resident

Section 2(30) defines non-resident as a person who is not a resident. Section 6 lays down the test of residency for different taxpayers as under:

A. Individual

An individual is said to be non-resident in India if he is not a resident in India. An individual shall be deemed to be resident in India if he satisfies any of the following conditions:

1.  If he is in India for a period of 182 days or more during the previous year; or

2.  If 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.

Condition no. 2 is not taken into consideration in cases given below:

a) If an Indian citizen leaves India during the previous year for the purpose of employment outside India;

b)If an Indian citizen leaves India during the previous year as a member of the crew of an Indian ship; 

or c)  If an Indian citizen or a person of Indian origin comes on a visit to India during the previous year. [A person shall be deemed to be of Indian origin if he or either of his parents or any of his grand-parents, was born in undivided India] Note: With effect from Assessment Year 2015-16, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.

B. Partnership firm : A partnership firm is treated as non-resident in India if control and management of its affairs are situated wholly outside India. C. Company An Indian company is always resident in India. A foreign company is treated as resident if, during the previous year, control and management of its affairs is situated wholly in India. In other words, a foreign company is treated as non-resident if control and management of its affairs is situated wholly or partly outside India.

Read more at: http://taxguru.in/income-tax/benefits-residents-income-tax-act1961.html

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