The Tax Publishers

Income tax--Residential Status

Rules of Residence--Recent Developments

Pawan Prakash

The Finance Act, 2020 read with The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has carried out far reaching amendments in Section 6. The learned author explains the amendments with the help of apt illustrations.

1. New rules of residence for citizen of India or person of Indian origin

(i) Current position

Section (1) of Section 6 of the Act provide for situations in which an individual shall be resident in India in a previous year. Currently, an individual is said to be resident in India in any previous year, if he--

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or

(b) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

Clause (b) of Explanation 1 to Section 6(1) provides that an Indian citizen or a person of Indian origin, who being outside India, comes on a visit to India, shall be Indian resident if he is in India for 182 days instead of 60 days in that year. This provision provides relaxation to an Indian citizen or a person of Indian origin allowing them to visit India for longer duration without becoming resident of India.

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