|Nature of Income
|Taxability in the hands of Non-resident
|Income which accrues or arises in India
|Income which is deemed to accrue or arise in India
|Income which is received in India
|Income which is deemed to be received in India
|Income accruing outside India from a business controlled from India or from a profession set up in India
|Income other than above (i.e., income which has no relation with India)
In case of Non Resident Tax Chargeability on income depends upon following:
(A). Determining Residential Status.
To find whether a person is a Non-resident Indian or not we have to first check his/her Residential Status.
To determine the residential status of an individual, the first step is to ascertain whether he is resident or non-resident. If he turns to be a resident, then the next step is to ascertain whether he is resident and ordinarily resident or is a resident but not ordinarily resident.
Step 1 given below will ascertain whether the individual is resident or non-resident and step 2 will ascertain whether he is ordinarily resident or not ordinarily resident. Step 2 is to be performed only if the individual turns to be a resident.
Step 1: Determining whether resident or Non-resident
Under the Income-tax Law, an individual will be treated as a resident in India for a year if he satisfies any of the following conditions (i.e. may satisfy any one or may satisfy both the conditions):
(a) He is in India for a period of 182 days or more in that year; or
(b) He is in India for a period of 60 days or more in the year and for a period of 365 days or more in 4 years immediately preceding the relevant year.
If an individual does not satisfy any of the above conditions he will be treated as non-resident in India.
Note : Condition given in (b) above will not apply to an Indian citizen leaving India for the purpose of employment or to an Indian citizen leaving India as a member of crew of Indian ship or to an Indian citizen/person of Indian origin coming on a visit to India. A person is said to be of Indian origin, if he or any of his parents or grand-parents (maternal or paternal) were 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.
Step 2: Determining whether resident and ordinarily resident or resident but not ordinarily resident
A resident individual will be treated as resident and ordinarily resident in India during the year if he satisfies following conditions:
(a) He is resident in India for at least 2 years out of 10 years immediately preceeding the relevant year.
(b) His stay in India is for 730 days or more during 7 years immediately preceeding the relevant year.
A resident individual who does not satisfy any of the aforesaid conditions or satisfies only one of the aforesaid conditions will be treated as resident but not ordinarily resident.
In other words, following test will determine the residential status of an individual:
(B). Determine Taxability/Nature of Receipts i.e. whether receipts are taxable or not In India:
(a) Taxability of Salaries:
In Case Salaries are Received By citizen of India from Government of India for rendering services outside India is also taxable in India.
(b) Taxability of Income from House Property:
(c) Taxability of Income from business and profession:
(c) Taxability of Capital Gains.
(d) Taxability of other Income.