2. RESIDENTIAL STATUS IMPORTANCE
• the determination of the residential status of a person is very significant in
order to find out his tax liability
• Tax incidence on an assesse depends on his residential status. For instance,
whether an income, accrued to an individual outside India, is taxable in India
depends upon the residential status of the individual in India
• Citizen ship/domicile etc are treated as irrelevant for residential status
3. TAXABLE ENTITY
• An Individual,
• A Hindu Undivided Family,
• A firm,
• An Association of Persons,
• Joint stock company and
• any other person
4. Residential status of Individual case
• Resident or Non-Resident
• If Non-resident declared no more further verification
• If Resident declared then we have check if an individual
Resident and ORDINARY
Resident and NON-ORDINARY
5. IMPORTANT CONSIDERATIONS
1. Different residential status for different assessment years -An assesse may
enjoy different residential status for different assessment years.
2. Residential status for each previous year – Residential status of an assessee
is to be determined in respect of each previous year as it may vary from
previous year to previous year
3. However, A person may be resident in two (or more) countries at the same
time. It is, therefore, not necessary that a person who is resident in India
will be non-resident in all other countries for the same assessment year.
6. Now u may be thinking , then how to determine
residential status of an individual
• Early questions may be..
• …..is it because of religion
• …..is it because of age
• …..is it because of colour, social status etc.
• ….so many questions may arise
• …. simple and easy Answer is given by (Section 6(1) )
7. Basic conditions
“ for Resident and Non-Resident “
• (1) He is in India in the previous year for a period of 182 days or more
• ( 2) He is in India for a period of 60 days or more during the relevant previous year
and 365 days or more during 4 years immediately preceding the previous year
• Decision based on No. of days spend in India , the days spend ranges either one
year or five years , the procedure will be explained in example
8. Exception to rule
In the following two cases, an individual needs to be present in India for a period of 182 days
or more in order to become resident in India
• An Indian citizen who leaves India during the previous year for the purpose
of taking employment outside India
• An Indian citizen leaving India during the previous years a member of the
crew of an Indian ship.
• An Indian citizen or a person of Indian origin who comes on visit to India
during the previous year (a person is said to be of Indian origin if either he
or any of his parents or any of his grand parents was born in undivided
India).
