Residential Status

Covering how to determine residential status of different persons with interactive simulation

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Updated upto A.Y. 2019-20
Residential status of persons (like individual, company, etc.) determines the scope of chargeability of his income. Whether a person will be charged to a particular income or not, depends on his residential status.
Sec. 6 provides the test for residential status for the persons which can be categorized as under:
Residential Status

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Determination of Residential Status

Conditions to be a ResidentConditions to be an Ordinarily resident

Individual

Assessee satisfies any one condition of sec. 6(1) i.e.

  1. He is in India in the previous year for a period of 182 days or more; or
  2. He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 previous years immediately preceding the relevant previous year.

Exceptions

In the following cases, (b) is irrelevant:

  1. An Indian citizen, who leaves India during the previous year for employment purpose.
  2. An Indian citizen, who leaves India during the previous year as a member of crew of an Indian ship.
  3. An Indian citizen or a person of Indian origin, who normally resides outside India, comes on a visit to India during the previous year.
Assessee satisfies both the conditions of sec. 6(6)

  1. He has been resident in India in at least 2 out of 10 previous years immediately preceding the relevant previous year; and
  2. He has resided in India for a period of 730 days or more during 7 previous years immediately preceding the relevant previous year.

HUF

Management is wholly or partly situated in IndiaKarta satisfies both the conditions of sec. 6(6)

Indian Company

Always residentNot applicable

Other Company

Place of effective management is in IndiaNot applicable

Firm / BOI / AOP / Other Person

Management is wholly or partly situated in IndiaNot applicable
Also Read  Firm Assessment

Incidence of Tax [Sec. 5]

Nature of IncomeResident & ordinarily residentResident but not ordinarily residentNon resident
Income accrued or deemed to be accrued and received or deemed to be received in India
Taxable
Taxable
Taxable
Income accrued outside India but received or deemed to be received in India.
Taxable
Taxable
Taxable
Income accrued or deemed to be accrued in India but received outside India
Taxable
Taxable
Taxable
Income accrued and received outside India from a business controlled in or profession set-up in India.
Taxable
Taxable
Not taxable
Income accrued and received outside India from a business controlled or profession set-up outside India.
Taxable
Not taxable
Not taxable
Income accrued and received outside India in the previous year (it makes no difference if the same is later remitted to India).
Taxable
Not taxable
Not taxable
Income accrued and received outside India in any year preceding the previous year and later on remitted to India in current financial year.
Not taxable
Not taxable
Not taxable

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