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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases

Under the Income-tax Act, 1961, which of the following best describes the residential status test for an individual who is a 'resident but not ordinarily resident' (RNOR)?

A resident individual is 'not ordinarily resident' if he was non-resident in 9 of the preceding 10 years or stayed in India 729 days or less in the preceding 7 years. Otherwise a resident is ordinarily resident, so these are the two RNOR conditions.

  1. AAn individual who is a resident and has been non-resident in 9 out of the 10 previous years, or has stayed in India for 729 days or less in the 7 previous yearsCorrect
  2. BAn individual who stayed in India for fewer than 60 days in the previous year
  3. CAn individual who is a citizen of India but lives abroad permanently
  4. DAn individual who has been resident in India in every one of the last 10 years

Explanation

A resident individual is RNOR if he was non-resident in 9 of the 10 preceding previous years, or his stay in India in the 7 preceding previous years was 729 days or less. Staying fewer than 60 days does not decide RNOR status, and citizenship alone does not decide residential status. Being resident in all 10 years makes the person ordinarily resident.

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