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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Which of the following statements about the residential status of an individual under the Income-tax Act is correct?

Residential status is determined separately for each previous year, based on the number of days the individual stays in India. It is not fixed for life and is not decided by citizenship alone, so it can change from one year to the next.

  1. AResidential status is decided once for life and does not change
  2. BAn individual who stays in India for 182 days or more in a previous year is a resident
  3. CResidential status is determined separately for each previous yearCorrect
  4. DAn individual's citizenship alone decides residential status

Explanation

Residential status is tested each previous year based on days of stay, so it can change from year to year. Option B is incomplete since the basic test is 182 days or 60 days plus 365 days in the preceding four years, but statement C is the unambiguously correct one. Citizenship does not by itself decide status.

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