NRI Services in Delhi

Who is NRI?

Person resident in India means

• A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include :
  • Person who has gone out of India or who stays outside India, in either case
  • For or on taking up employment outside India, or
  • For carrying on outside India a business or vocation outside India, or
  • For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period
• A person who has come to or stays in India, in either case, otherwise than
  • For or on taking up employment in India, or
  • For carrying on in India a business or vocation in India, or
  • An office, branch or agency outside India owned or controlled by a person resident in India;
• Any person or body corporate registered or incorporated in India,
• An office, branch or agency in India owned or controlled by a person resident outside India,
• An office, branch or agency outside India owned or controlled by a person resident in India;

Non resident under Income-tax Act, 1961

• The term non-resident is negatively defined under section 6 of the Income-tax Act, 1961. An individual who is not a resident under the Income-tax Act is a non-resident. The residential status of an Individual is determined based on the number of days of stay in India. Financial year (FY) is April to March.
  For the purposes of levy of tax, the Income-tax Act in India has classified the status of an individual assesses into three viz.
  • Resident and ordinarily resident (ROR)
  • Resident but not ordinarily resident (R but NOR)
  • Non-resident (NR)
The definition is explained in simple terms as under.

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):

• He is in India for a period of 182 days or more in that year; or
• 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 immediately preceding 4 years.
However, in respect of an Indian citizen and a person of Indian origin who visits India during the year, the period of 60 days as mentioned in (2) above shall be substituted with 182 days. The similar concession is provided to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India.
The Finance Act, 2020, w.e.f., Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. Income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India). [A s amended by Finance Act, 2021]
Note: The Finance Act, 2020 has introduced new section 6(1A) to the Income-tax Act, 1961. The new provision provides that an Indian citizen shall be deemed to be resident in India only if his total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. For this provision, income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).
However, such individual shall be deemed to be Indian resident only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature.
Thus, from Assessment Year 2021-22, an Indian Citizen earning total income in excess of Rs. 15 lakhs (other than from foreign sources) shall be deemed to be resident in India if he is not liable to pay tax in any country. "Liable to tax" in relation to a person and with reference to a country means that there is an income-tax liability on such person under the law of that country for the time being in force. It shall include a person who has subsequently been exempted from such liability under the law of that country. If an individual does not satisfy any of the above conditions then he will be treated as non-resident in India.

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 the following conditions:


• He is resident in India for at least 2 years out of 10 years immediately preceding the relevant year; or
• His stay in India is for 730 days or more during 7 years immediately preceding the relevant year. However, w.e.f., Assessment Year 2021-22, the Finance Act, 2020 has inserted the following two more situations wherein a resident person is deemed to be 'Not Ordinarily Resident' in India:
  • An Indian Citizen or a person of Indian origin whose total income (other than income from foreign sources) exceeds Rs. 15 lakhs during the previous year and who has been in India for a period of 120 days or more but less than 182 days; [As amended by Finance Act, 2021]
  • An Indian Citizen who is deemed to be resident in India as per new Section 6(1A). 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 short, following test will determine the residential status of an individual:

• If the individual satisfies any one or both the conditions specified at step 1 and satisfies any of the conditions specified at step 2, then he will become resident and ordinarily resident in India.
• If the individual satisfies any one or both the conditions specified at step 1 and satisfies none or one condition specified at step 2, then he will become resident but not ordinarily resident in India.
• If the individual satisfies none of the conditions specified at step one, then he will become non-resident.


In the case of a ROR, his global income is taxed in India. Normally a returning Indian would be assessed as RNOR on his return to India.

In the case of a Non-resident, only the income earned or received in India is taxed in India. Accordingly, income earned outside India by him would not be taxable in India.




A Person of Indian Origin (PIO)

• PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sir Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who
  • at any time, held an Indian Passport or
  • who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
• India has signed Double Tax Avoidance Agreements (DTAAs) with various countries. Taxability of Non Resident's Indian income would be decided as per the provisions of these DTAAs. Most of these DTAAs contain provisions for lower rates of tax in case of incomes like dividend, royalties, fees for technical services etc.

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