SCHEME OF ADVANCE RULINGS FOR NON-RESIDENTS UNDER THE INCOME-TAX ACT,1961

WHO IS A NON-RESIDENT?

Under the existing provisions of the Income Tax Act, 1961, the taxable entities are broadly divided into three groups, viz. Individual, Company, and all other persons such as Hindu Undivided Family, Firm, Association of Persons, etc.

These taxable entities are divided into three categories depending upon their residential status. These categories are:

• Resident
• Resident but not ordinarily resident; and
• Non-resident

As already explained above, the benefit of seeking advance ruling is available only to a non-resident. The resident status of each group of the taxable entities are, in brief, as under:

INDIVIDUAL:
An individual is a resident in India in any previous year:

1. If he has been in India during the previous year for 182 days or more.
2. If the individual (not being one of the categories mentioned in para 3 below) has been in India during the previous year for less than 182 days but has been in India for an aggregate of 365 days or more in the four years preceding the previous year and his stay in India during the previous year is 60 days or more.
3. The categories of persons mentioned above are-
   1. a citizen of India who has left India during the previous year as a member of the crew of an Indian ship or for the purposes of employment outside India, and
   2. a citizen of India or a person of Indian origin* who, being outside India, has come to India on a visit during the pervious year.
4. Persons falling under para 3 are resident only if their stay in India during the previous year is 182 days or more even where the duration of their stay in India during the earlier four year is 365 days or more.

• A person of Indian origin is one if he, or either of his parents or any of his grand-parents, was born in undivided India.
  
  Individuals, who are not resident in accordance with the above, are treated as non-resident under the Income-tax Act.

COMPANY:
A company is a non-resident if it is neither an Indian company nor one the control and management of whose affairs during the previous year is situated wholly in India.

EVERY OTHER PERSON:
Every other person is a non-resident if, during a previous year the control and management of its affairs is situated wholly outside India.

IF A PERSON IS RESIDENT IN INDIA
In respect of any source of income in any previous year he shall be deemed to be resident in India in respect of each of his other sources of income in that previous year.

Frequently Asked Questions By Non-Resident Indians

[What is the Scheme of Advance Ruling?][ What is the mechanism for Pronouncing Advance Rulings?][What are benefits of Advance Rulings?][Who can Seek Advance Rulings?][Who is a Non-Resident?][What are the Questions on which Advance Ruling can be sought?][How to seek Advance Rulings?][Where to get assistance?]