A. For the purpose of availing of the facilities of opening and maintenance of bank accounts and investments in shares/ securities in India:

A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian Origin, if,
1. He, at any time, held an Indian passport.
2. He or either of his parents or any of his grand parents was a citizen of India bu virtue of the Constitution of India or Citizenship Act, 1956( 57 of 1955)
Note: A spouse ( not being a citizen of Pakistan or Bangladesh ) of an Indian Citizen or of a person of Indian Origin is also treated as a person of Indian origin for the above purpose.

B For Investment in immovable properties: A foreign citizen ( other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri lanka or Nepal ), is deemed to be of Indian origin if,
1. He held an Indian passport at any time, OR
2. He or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 ( 57 of 1955)

Overseas Corporate Bodies predominantly owned by Individuals of Indian Nationality and origin resident outside India (OCBs) include overseas Companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly to the extent of atleast 60% by individuals of Indian Nationality or Indian Origin resident outside India as also overseas trusts in which atleast 60% of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees.

The various facilities granted to NRIs are also available with certain exceptions to OCBs as long as the ownership/Beneficial interest held in them by NRIs continues to be at or above the level of 60%.

In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned corporate body/trust is required to furnish a certificate from an overseas Auditor/Chartered Accountant/Certified Public accountant in form OAC, where ownership/beneficial interest is directly held by NRIs, and in form OAC-1 where it is held indirectly by NRIs.

Liability to pay tax in India does not depend on the nationality or domicile of the Tax payer but on his residential status. Residential Status is determined on the basis of physical presence i.e. the number of days of stay in India in any year.

A. An individual is resident if any of the following conditions are satisfied:
1. He stayed in India for 182 days or more during the previous year, or
2. He stayed in India for 365 days or more during the four preceding years and stays in India for atleast 60 days 9 182 days in case of an Indian citizen or a person of Indian Origin coming on a visit to India or 182 days in case of an Indian citizen going abroad for an employment ) during the previous year. Stay in India for the above criteria may be continuous or intermittent.
B. Hindu Undivided Family (HUF) or firm or other Association of persons is resident of India except in cases where the control and management of its affairs is wholly situated outside India in the previous year. C. A company is resident in India if-
1. It is an Indian company, or
2. During the previous year, the control and management is situated wholly in India.
3. A person resident in India, in a previous year in respect of any source of income shall be deemed to be resident in India in respect of his other sources of income.

A person is non-resident if he is not resident in India.

An individual or an HUF is treated to be not ordinarily resident in India in any previous year if he or the manager of HUF-
a. Has not been resident in India in 9 out of 10 previous years preceding the previous year; or
b. Has not during the seven previous years preceding that year, been in India for a period of or periods amounting in all to 730 days or more.
c. Thus according to condition in clause (a) a newcomer to India would remain not ordinarily resident in India for the first 9 years of his stay in India. Similarly, in case where a person who is resident in India goes abroad and ceases to be resident in India for atleast 2 years, he would upon his return, be treated as, not ordinarily resident for the next 9 years.

1. In case of Indian citizen who leaves Indian during previous year for the purpose of employment.
Such a person is resident in India if he satisfies the following conditions:

1. He stays in India for atleast 182 days during the previous year.
2. He is resident in India for atleast 9 out of 10 years preceding the previous year.
3. He is resident in India for atleast 730 days during 7 years preceding the previous year.
4. If such a person satisfies condition (a) but does not satisfy either of the conditions at ( b) or (c) above, such a person would be resident but not ordinarily resident.

Such person would be non-resident if he does not satisfy condition (a) stated above.
1. In case of Indian citizen or a person of Indian origin living abroad comes to India for a visit during the previous year.
The residential status of such a person is to be determined after looking into the following
1. He stays in India for atleast 182 days during the pervious year and
2. He is resident in India for atleast 9 years out of 10 years preceding the previous year.
3. He is resident in India for atleast 730 days during seven years preceding the previous year.

The person would be resident in India if he satisfies all the conditions (a) to (c) above.
The person would be resident but not ordinarily resident if he satisfies the condition at (a) but does not satisfy any or either of the conditions at (b) and (c) above.

The person would be non-resident if he does not satisfy the condition at 9a) above.
Thus condition (a) is of fundamental importance and must be satisfied to be resident in india. Conditions ( b) and (c) only help to qualify that resident status.
1. In case of any other individual
For individuals other than those included in category ( I ) or (ii), we have to look into the following four conditions to determine the residential status:

1. He stays in India for atleast 182 days during the previous year.
2. He stays in India for atleast 60 days during the previous year and for atleast 365 days during 4 year preceding the previous year.
3. He is resident in India atleast in 9 out of 10 years preceding the previous year.
4. He is resident in India for atleast 730 days during 7 years preceding the previous year.

A person would be resident in India if he satisfies any of the conditions at (a) or (b) and both the conditions at (c) and (d) i.e. he either satisfies conditions (a) , (c) and (d) or (b), (c) and (d).
A person would be resident but not ordinarily resident if he satisfies either of the conditions at (a) or (b) and does not satisfy both or either of the conditions at (c) and (d). In other words, if a person satisfies condition (a) or (b) only but does not satisfy either (c) or (d) or both, he would be treated as resident but not ordinarily resident in India

If a person satisfies neither of the conditions (a) or (b) , he is non-resident.

An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in U.N. Organisations and Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents). Non –Resident foreign citizens of Indian Origin are treated on par with non-resident Indian Citizens (NRIs) for the purpose of certain facilities.

1. Indian citizens who stay abroad for employment or for carrying on a business or Vocation or any other purpose in circumstances indicating an indefinite period of stay abroad.

2. Indian citizens working abroad on assignment with foreign government agencies like United Nations Organisation (UNO), including its affiliates, International Monetary Fund (IMF), World Bank etc.

3. Officials of Central and State Government and Public Sector undertaking deputed abroad on temporary assignments or posted to their offices, including Indian diplomat missions, abroad.

The residential status of a person is decided under two different Acts, one under Income Tax Act, 1961, ( I.T. Act) and another under Foreign Exchange Regulation Act, 1973 (FERA). The concept of Non-Resident under FERA is different as compared to that under Income Tax Act. Under Income Tax Act, the residential status of a person is determined on the basis of number of days he stays in India whereas under FERA, it is the intention of a person to be in India or outside India would be an important factor determining his residential status.

The residential status for the Income Tax Act is determined in section 6 as under:

1. An individual will be treated as a resident in India in any previous year if he fulfills any of the following two conditions:
a) He/She is in India in that year for period or periods amounting in all to 182 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 365 days or more, and has been in India for 60 days or more in that year.

2. Under Explanation to section 6 (1) of the Income-tax Act, the residential status of an individual who is rendering service outside India and who visits India during leave or vacations in any previous year or an individual who is outside India and who comes on a visit to India in any previous year will be determined as under :

a) An Indian citizen who leaves India in any previous year for the purpose of employment outside India or as a crew member of an Indian ship would be treated as a resident in India if he stays in India in that year for 182 days or more [instead of 60 days as stated in 1 (b) above ]. Conversely, if he stays in India for less than 182 days, he will be treated as non-resident for that year and his foreign income would not attract tax liability.

Further, w.e.f. 1 st April, 1999, a crew member will be treated as non-resident in India if he is on board such ship outside the territorial water of India for 182 days or more during any year.

b) An Indian citizen or a person of Indian origin who resides outside India and who comes on a visit to India in any previous year will be treated as resident in India if he stays in India in that year for 182 days or more [instead of 60 days as stated in 1 (b) above.]

Conversely, he will be treated as non-resident if he stays in India in that year for less than 182 days.

An individual (whether Indian citizens or not) who is outside India and who comes on a visit to India in any previous year will be treated as "non-resident" in India if he stays in India in that previous year less than 182 days subject to the condition that during the preceding four previous years his stay in India does not amount to 365 days or more.

An Individual who fulfills any of the conditions mentioned in section 6(1) is treated as resident in India. But in order to become an "ordinarily resident", he must satisfy the following two conditions as laid down under section 6(6) (a) of the Income-tax Act, 1961:

(i) He should have been resident in India in nine out of the ten previous years preceding the previous year in which he is resident within the meaning of section 6(1); and
(ii) He should have been in India for a period or periods amounting in all to 730 days or more during the seven years preceding that previous year.

If he does not fulfill any of the above conditions, he will be treated as "not ordinarily resident".

4. An individual who does not satisfy both the conditions as mentioned above as laid down in section 6 (1) will be treated as "non-resident" in that previous year
5. A Hindu undivided family, firm or other association of persons will be treated as "non –resident" in India in any previous year if the control and management of its affairs is situated wholly outside India during that year.
6. A company will be treated as "non-resident" in India in any previous year if it is not an Indian company and also the control and management of its affairs is not ] situated wholly in India in that year.

Section 2 (p) and 2 (q) of FERA define resident and non-resident as under:

2(p) "person resident in India" means-

(i) a citizens of India ,who has, at any time after the 25 th day of March, 1947, been staying in India, but does not include a citizens of India who has gone out of, or stays outside, India in either case-

a. For or on taking up employment outside India, or
b. For carrying on outside India a business or vocation outside India, or
c. For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

(ii) a citizen of India, who having ceased by virtue of paragraph (a) or paragraph (b) or paragraph (c) of sub-clause (i) to be resident in India, return to, or stays in, India, in either case-

a. For or on taking up employment in India, or
c. For carrying on in India a business or vocation in India, or
d. For any other purposes, in such circumstances as would indicate his intention to stay in India for an uncertain period

(iii) A person, not being a citizen of India, who has come to, or stays in India, in either case-

a. For or on taking up employment in India, or
b. For carrying on in India a business or vocation in India, or
c. For any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period.

(iv) a Citizen of India, who not having stayed in India at any time after the 25 th day of March, 1947, comes to India for any of the purpose referred to in paragraphs (a), (b), and (c) of the sub-clause (iii) or for the purpose and in the circumstances referred to in paragraph (d) of that sub-clause or having come to India stays in India for any such purpose and in such circumstances.

Explanation.- A person, who has, by reason only of paragraph (a) or paragraph (b) or paragraph (d) of sub-clause (iii) been resident in India, shall, during any period in which he is outside India be deemed to be not resident in India.

A. It has been clarified in the Exchange Control Manual (ECM) that Indian Citizens who proceed abroad for business visits, medical treatment, study which do not indicate their intention to stay outside in India for an indefinite period will be considered as "person resident in India" during their temporary absence from India.

B. An office or a branch situated in India, of any business, whether carried on by a body corporate or otherwise, whether Indian or Foreign, is treated for all purpose of FERA as "person resident of India".

2 (q) "person resident outside India" means a person who is not resident in India . Thus the term "non-resident" is synonymous with the term, "person resident outside India".