Non Resident
Non-Resident Individual is an individual who is not a resident of India for tax purposes. In order to determine whether an Individual is a Non-Resident or not, his residential status is required to be determined u/s 6 of the Income Tax Act, 1961 as given below:
An individual will be treated as a Resident in India in any previous year if he / she satisfies any of the following conditions:
1. If he / she is in India for a period of 182 days, or more during the previous year or
2. If he / she is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.
An individual who does not satisfy both the conditions as mentioned above will be treated as Non-Resident in that previous year.
However, in respect of an Indian citizen and a person of Indian origin who visits India during the year, the period of 60 days as mentioned in (2) above shall be substituted with 182 days. The similar concession is provided to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India.
The Finance Act, 2020, w.e.f. Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose Total Income, other than Income from Foreign Sources, exceeds ₹ 15 lakh during the previous year.
The Finance Act, 2020 has also introduced new Section 6(1A) which is applicable from Assessment Year 2021-22. It provides than an Indian citizen earning Total Income in excess of ₹ 15 lakh (other than income from foreign sources) shall be deemed to be Resident in India if he / she is not liable to pay tax in any country.
Tax Slabs for AY 2024-25 (FY 2023-24) & AY 2025-26 (FY 2024-25):
Non-Resident Individuals can opt for the old tax regime or the new tax regime with lower rates of taxation under section 115BAC of the Income Tax Act. The new tax regime doesn’t allow certain exemptions and deductions available in the existing tax regime.
| Tax Regime | Income Tax Slab | Income Tax Rate |
|---|---|---|
| Old Tax Regime | Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% above ₹2,50,000 | |
| ₹5,00,001 – ₹10,00,000 | ₹12,500 + 20% above ₹5,00,000 | |
| Above ₹10,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | |
| New Tax Regime | Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% above ₹3,00,000 | |
| ₹6,00,001 – ₹9,00,000 | ₹15,000 + 10% above ₹6,00,000 | |
| ₹9,00,001 – ₹12,00,000 | ₹45,000 + 15% above ₹9,00,000 | |
| ₹12,00,001 – ₹15,00,000 | ₹90,000 + 20% above ₹12,00,000 | |
| Above ₹15,00,000 | ₹1,1,4,000 + 30% above ₹15,00,000 |
Surcharge, Marginal Relief, and Health and Education Cess:
- Surcharge is an additional charge levied for persons earning income above specified limits.
- 10% – Taxable Income above ₹50 lakh – Up to ₹1 crore
- 15% – Taxable Income above ₹1 crore – Up to ₹2 crore
- 25% – Taxable Income above ₹2 crore – Up to ₹5 crore
- 37% – Taxable Income above ₹5 crore
- Maximum surcharge on certain types of income is 15%.
- Marginal relief is provided when the surcharge payable exceeds the additional income that makes the person liable for surcharge.
- Health and Education cess at 4% shall also be paid on the amount of income tax plus surcharge (if any).
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