As per Income Tax Act, 1961, the taxability of person depends upon the Residential Status of the individual for the previous year. Residential status of an Individual is to be checked every year. Section 6 of the Income Tax Act defines the criteria for determining residential of an Individual. Recently by The Finance Act, 2020, government made certain changes in the criteria to determine the Residential Status.
As per IT Act, residential status is divided in to 3 categories, we shall understand the each categories in this article:
- Resident but not ordinary resident