As per section 6 of the Income-Tax Act, an individual is said to be non-resident in India if he is not a resident in India and an individual is deemed to be resident in India in any previous year if he satisfies any of the following conditions:

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

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There are 2 exceptions to the above rule of classification of Residential Status:

• In case of an individual, who is a citizen of India and who leaves India in any financial year for the purpose of employment outside India, the 2nd condition stated above shall not be applicable and only the 1st condition of 182 days or more would be applicable.
• In case of an individual (whose Indian income is less than Rs. 15 Lakhs) who is a citizen of India or is a person of Indian origin and who being outside India comes on a visit to India in any financial year, the 2nd conditions stated above shall not be applicable and only the 1st condition of 182 days or more would be applicable. In case the Indian income is more than 15 lakhs – then the no. of days in the 2nd condition would be considered as 120 instead of 60)

If an individual qualifies as a resident, the next step is to determine if the individual is a Resident ordinarily resident (ROR) or an RNOR. An individual will be a ROR if both of the following conditions are met:

• Has been a resident of India in at least 2 out of 10 years immediate previous years and
• Has stayed in India for at least 730 days in 7 immediately preceding years

However, if any individual fails to satisfy even one of the above conditions, he would be an RNOR. From FY 2020-21, a citizen of India or a person of Indian origin who leaves India for employment abroad during the year will be a resident and ordinarily resident if he stays in India for an aggregate period of 182 days or more. However, this condition will apply only if his total income (other than foreign sources) exceeds Rs 15 lakh. Also, a citizen of India who is deemed to be a resident in India (w.e.f FY 2020-21) will be a resident and ordinarily resident in India.