Are you resident or non resident? That is what will be computed by the residential calculator . As per Income Tax Act , the first thing for deciding your tax liability is to find whether you are resident or non resident in India in a previous year ( financial year) .You must be aware that the residential status law is provided under section 6 of the Income Tax Act . Simple rule of taxation as per section 5 which defines total income is as under :
- If you are resident , your global income is to be include in total income for charging tax.
- If you are non resident , only income accrued or arisen or received in India is tax able under Income Tax Act.:
There are other conditions -like visit to India or going abroad for employment- creates problem to find out the residency of an assessee. So , a calculator to find out the residency of an Individual is created. Readers should note that a detailed FAQ on residency aspect of an assessee was put with title Tax Residency in India Simplified For You ! .