Changes in provision determining Residential Status of any individual:
A. Currently, An Indian citizen or Person of Indian Origin is considered to be resident of India if:
(i) He has been in India for an overall period of 365 days or more within 4 years preceeding that year; and
(ii) He is in India for overall period of 182 days or more in that year
This provision has been made more stringent now by reducing time period of 182 days to 120 days.
B. Currently, conditions to be satisfied for qualifying as ‘Not Ordinarily Resident’ are:
(i) He has been a Non-resident in India in 9 out of 10 previous years
(ii) He has been in India for 729 days or less in 7 previous years
This provision has been liberalized by abolishing above mentioned dual condition and now assesse needs to be a non- resident in India in 7 out of 10 previous years to qualify as Not Ordinarily Resident.
C. New provision has been inserted namely, an Indian citizen shall be deemed to be resident of India in any previous year, if he is not liable to tax in any other country due to reason of his domicile or residence or any other criteria of similar nature.
These provisions will largely impact the residential status of NRIs and accordingly taxability of global income will be decided.
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