Residential Status in India for Assessment Year 2021-22

Residential status plays a crucial role in determining the taxation rules applicable to an individual in India. In this case, Mr. Vishal, an American tourist, arrived in India on May 27, 2020, and left on November 20, 2020. Let's explore the impact of his visit on his residential status for the assessment year 2021-22, taking into consideration whether he visited India for a business trip or not.

Residential Status Determination

Residential status is determined based on the number of days an individual stays in India during a financial year (April 1 to March 31). It is classified into three categories:

1. Resident and Ordinarily Resident (ROR): An individual is considered ROR if he/she meets any of the following conditions:
- Stays in India for at least 182 days or more during the financial year.
- Stays in India for 60 days or more during the financial year and has been in India for 365 days or more during the preceding four financial years.

2. Resident but Not Ordinarily Resident (RNOR): An individual is considered RNOR if he/she meets the following condition:
- Has been a non-resident in India for nine out of the ten preceding financial years, or
- Stays in India for 729 days or less during the preceding seven financial years.

3. Non-Resident (NR): An individual is considered NR if he/she does not meet any of the above conditions.

Impact of Business Trip

Mr. Vishal's purpose of visit to India, whether for tourism or a business trip, can have an impact on his residential status determination for the assessment year 2021-22. Let's explore both scenarios:

1. Tourism Visit: If Mr. Vishal visited India solely for tourism purposes, the number of days he spent in India will be considered to determine his residential status. If he stays for 182 days or more during the financial year, he would be classified as ROR. If he stays for less than 182 days, he would be considered NR.

2. Business Trip: If Mr. Vishal visited India for a business trip, the primary factor to determine his residential status would still be the number of days spent in India. However, there is an additional condition to consider. If he has been a non-resident in India for nine out of the ten preceding financial years, he would be considered RNOR, even if he stays for 182 days or more during the financial year. If he does not meet this condition, his residential status would be determined as per the regular criteria mentioned earlier.

Conclusion

In conclusion, Mr. Vishal's residential status for the assessment year 2021-22 will primarily depend on the number of days he stays in India during the financial year. However, if he meets the criteria of being a non-resident for nine out of the ten preceding financial years, his residential status may differ even if he stays for 182 days or more. It is essential for Mr. Vishal to consult with a tax professional to determine his exact residential status and understand the tax implications accordingly.