Residential status ss

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Residential status ss

  1. 1. Residential status<br />Section 6 lists the provisions regarding residential status.<br />Why residential status is important?<br />The residential status determines the taxability of various income. <br />E.g. income earned outside India will not be taxed in case of a non-resident while such income would be taxable in the hand of a resident and ordinarily resident.<br />CA Siddharth Ranjan<br />1<br />
  2. 2. Residential status<br />Resident(R)<br />Not Ordinarily Resident (NOR)<br />Non-Resident (NR)<br />Types of Residential Status<br />CA Siddharth Ranjan<br />2<br />
  3. 3. Residential Status of an Individual<br />Sec 6(1) & 6(6)<br />The residential status of individual will be determined as under-<br />CA Siddharth Ranjan<br />3<br />
  4. 4. Residential Status of an Individual (contd.)<br />Basic Conditions u/s 6(1):<br />existence in India for a period of 182 days or more during the previous year; or<br />existence in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.<br />Additional Conditions u/s 6(6):<br />He must be a non-resident in India in nine out of the ten previous years preceding that year; or<br />He must be in India during 7 preceding previous years for aggregate period of 729 days or less.<br />CA Siddharth Ranjan<br />4<br />
  5. 5. Residential Status of an Individual (contd.)Indian citizens leaving India for employment or as a member of crew of an Indian ship. <br />CA Siddharth Ranjan<br />5<br />
  6. 6. Residential Status of an Individual (contd.)<br />As per the explanation (a) added to sec 6(6) in such cases 182 days will be substituted for 60 days in the second condition so effectively that would become:<br /> ii) existence in India for a period of 182 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.<br />CA Siddharth Ranjan<br />6<br />
  7. 7. Residential Status of an Individual (contd.)when an Indian citizens or a PIO comes on a visit to india<br />CA Siddharth Ranjan<br />7<br />
  8. 8. Residential Status of an Individual (contd.)<br />As per the explanation (b) added to sec 6(6) in such cases 182 days will be substituted for 60 days in the second condition so effectively that would become:<br /> ii) existence in India for a period of 182 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.<br />CA Siddharth Ranjan<br />8<br />
  9. 9. Residential Status of HUF<br />Resident HUF: If the control and management of the affairs of HUF is situated wholly or partly in India then HUF is said to be Resident in India.<br />Non- Resident HUF: If the control and management of the affairs of HUF is situated wholly outside India then HUF is said to be Non- Resident in India.<br />Not Ordinarily Resident HUF: A resident HUF is said to be ‘Not Ordinarily Resident’ in India if Karta or manager thereof, satisfies any of the additional conditions u/s 6(6).<br />Sec 6(2) & 6(6)<br />The residential status of HUF depends upon the control and management of its affairs.<br />CA Siddharth Ranjan<br />9<br />
  10. 10. Remember<br />Incase of all other persons – they can either be residents or Non-Resident (NR)<br />Only an individual or a HUF can be Resident but Not Ordinarily Resident (NOR)<br />CA Siddharth Ranjan<br />10<br />
  11. 11. Residential status of a Company<br />An Indian Company is always Resident in India. <br />A foreign Company will be resident in India if Control or Management of its affairs is wholly situated in India.<br />section 6(3)<br />CA Siddharth Ranjan<br />11<br />
  12. 12. Residential status of a firm or AOP or other persons<br /><ul><li>Resident: If the control and management of the affairs of a firm or AOP or other person is situated wholly or partly in India then such a firm or AOP or other person is said to be resident in India.
  13. 13. Non-Resident: If the control and management of the affairs of a firm or AOP or other person is situated outside India then such a firm or AOP or other person is said to be non-resident in India.</li></ul>depends upon control and management of its affairs.<br />CA Siddharth Ranjan<br />12<br />
  14. 14. Incidence of Tax<br />CA Siddharth Ranjan<br />13<br />
  15. 15. Residential status &<br />Note:<br />As per the proviso to sec 5(1) (c) :In case of R-NOR, the income which accrues or arises to her outside India shall not be included in taxable income provided it is not derived from a business controlled in or a profession set up in India. <br />Scope of total income:<br />Section 5<br />CA Siddharth Ranjan<br />14<br />

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