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

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

An individual is resident in India if staying 182 days or more in the previous year, or 60 days or more along with 365 days or more in the preceding four years, subject to exceptions. Citizenship, birthplace or where income is spent do not decide residence.

  1. AAn individual is resident if in India for 182 days or more in the previous year, or 60 days or more in the previous year and 365 days or more in the preceding four years, subject to exceptionsCorrect
  2. BResidential status depends solely on the individual's citizenship
  3. CAn individual is resident only if born in India
  4. DResidential status is decided by where the individual's income is spent

Explanation

Residence is based on physical stay in India during the previous year and preceding years, not on citizenship, birthplace or where income is spent. The basic conditions are 182 days in the year, or 60 days plus 365 days in the preceding four years, with relaxations for certain persons such as Indian citizens leaving for employment abroad.

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