Residential Status

Residential status has been defined in section 6[1] of the Income-tax Act, 1961. This section covers the residential status of every person as stated in section 2(31)[2] of the act. The Individual and Hindu Undivided Family (HUF) has divided the residential status as resident and non-resident and the resident is further divided as a resident and ordinarily resident (ROR) and resident but not ordinarily resident (RNOR). While firm, an association of person, local authorities and company are only divided as resident and non-resident.

Residential Status


The resident basically depends upon the number of days its stays in the previous year. The residential status of the individual mainly depends upon the fulfillment of any of the conditions mentioned below:

  1. That the individual was present in India for the 182 days in the previous year ( according to the new Union budget it is 120 days); or
  2. That the individual has stayed 365 days during the immediate 4 previous years of the relevant previous year and in the relevant previous year, that individual has stayed for 60 days.

There are many exceptions to this rule where only 182 days rules will be applied. It is applied in the cases where Indian citizen leaves the India in the relevant previous member as the crew member; or the Indian citizen or Indian origin engaged outside India for employment or business or profession or in any other vocation.


In the HUF, Karta is the most important to determine the residential status. If a HUF has the control and management (head and brain) in India, wholly or partially, it is a resident. And if the control and management of the HUF are located wholly outside India will be non-resident.

Firm, association of person, local authority and artificial judicial person

These persons will be declared resident in India if their control and management are wholly or partly located in India. If the control and management are wholly situated outside India will be declared non- resident.


A company will be declared as the resident in India when any one of the condition is fulfilled:

  1. That the company is the Indian company (s. 2(26))[3]
  2. That the place of effective management is located in India for that particular previous year.



The resident can be either be resident and ordinarily resident (ROR) or resident but not ordinarily resident (RNOR). When the individual is proved as a resident then two conditions are fulfilled to be declared ROR. The conditions are

  1. That the resident was resident in any 2 out of the last 10 preceding relevant years; and
  2. The resident stayed in India for seven years preceding relevant years and stayed for a total of 730 days or more.

If both the conditions are fulfilled then that resident is ROR or else the resident is RNOR.


If the HUF is declared resident, then for declaration for ROR and RNOR, the karta’s condition is checked (conditions are the same as that of the individual). If the karta fulfills both the conditions, then the HUF is ROR else the HUF is RNOR.

Symbiosis Law School

[1] Residential Status under Income Tax Act,1961 – Revisited !, , (last visited Jan 23, 2021).

[2] Person [Section 2(31)] – Definations under I.Tax., , (last visited Jan 23, 2021).

[3] Ramdeo Kakra, Section 2(26) Income Tax: Indian Company – Meaning, CA Club (2019), (last visited Jan 23, 2021).

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