Basics of taxation

1. INCOME TAX
PROVISIONS OF RESIDENTIAL
STATUS

2. “
”
INCOME TAX
DEFINITION OF RESIDENTIAL STATUS
Individual are deemed to be residents of India under section 6(1) of Income Tax Act if they meet the following
conditions:
• If he/she stays in India for 182 days or more in a fiscal year or,
• If he/she stays in India for 60 days or more in fiscal year and if he/she stays in India for 365 days or more in
the four years immediately before the previous year and comes under ordinary resident in income tax.

3. Types of Residential Status
For “HUF”
• RESIDENT
a) Ordinary Resident
b) Non Ordinary Resident
• NON RESIDENT
For Firm, Company, AOP/BOI,
Local Authority
• RESIDENT
• NON RESIDENT

4. Residential Status of an Individual
“Resident”
The provision for resident is:-
(a) If he is in India during the relevant previous year for a period amounting to 182days or more[Section
6(1)(a)].
OR
a) If he was in India for a period amounting to 365 days or more than 4 years preceding the relevant previous
year and he was in India for a period of 60 days or more in that previous year[Section 6(1)(c)].
A) [Ordinary Resident] Section:6(1) r.w Section 6(6)(a) & (b):-
• He must be resident of India for 2 years in previous 10 years which I prior to previous year.
• He has stayed in India for at least 730 days in 7 previous year.
B) [ Non- Ordinary] Section 6(6) (a),(b),(c), and(d)]:-
• He was non resident in India for 9 previous year
• He was in India for a period of 729 days or less than it.

5. Non- Resident
Under Section 2(30) of the Income Tax Act 1961 an assessee who does not fulfil the conditions given in
sections 6(1)(a) or (b) would be considered as ‘Non- Resident’ assessee during the relevant previous year.
[RESIDENTIAL STATUS OF H.U.F]:-
The ‘Karta’ is the “HEAD OF THE HUF”.
• Karta has been resident for at least 2 previous year out of 10 previous years.
• Karta has been in India for 730 days or more during 7 previous years preceding the relevant previous year.
B) Not Ordinarily Resident:-
• Its manager (karta) has not been resident for 2 years out of 10 previous years.
OR
• The manager had not during the 7 previous years preceding the relevant year been present in India for 730 days.

6. Non- Resident
Under Section 2(30) of the Income Tax Act 1961 an assessee who does not fulfil the conditions given in
sections 6(1)(a) or (b) would be considered as ‘Non- Resident’ assessee during the relevant previous year.
[RESIDENTIAL STATUS OF H.U.F]:-
The ‘Karta’ is the “HEAD OF THE HUF”.
• Karta has been resident for at least 2 previous year out of 10 previous years.
• Karta has been in India for 730 days or more during 7 previous years preceding the relevant previous year.
B) Not Ordinarily Resident:-
• Its manager (karta) has not been resident for 2 years out of 10 previous years.
OR
• The manager had not during the 7 previous years preceding the relevant year been present in India for 730 days.

7. Residential status of Firm, AOP, or BOI
1) Ordinary Resident:-
• Resident= Control and management of affairs in India( wholly or partially).
2) Not Ordinarily Resident:-
• A firm, an association of persons(AOP) or body of individuals cannot claim the status of not ordinarily
resident. All these assesses shall be either resident in India or non resident in India.

8. THANK YOU