This Presentation includes the basic points for an easy understanding of the concepts and practical aspects of its applicability.

1. Dr. Yagna Vyas

2. • Importance & History of Income Tax
• Meaning of Person & Assessee
• Definitions of Various terms used in Income Tax
(Previous year, Assessment Year, Gross Total Income)
• What is regarded as Income under Income Tax Act?
• Residential Status

3.  The Income Tax was introduced in India for the first
time in 1860 by British rulers following the mutiny of
1857. The period between 1860 and 1886 was a period
of experiments in the context of Income Tax. This
period ended in 1886 when first Income Tax Act came
into existence. The pattern laid down in it for levying of
Tax continues to operate even to-day though in some
changed form. In 1918, another Act- Income Tax Act,
1918 was passed but it was short lived and was replaced
by Income Tax Act, 1922 and it remained in existence
and operation till 31st. March, 1961.

4. • Income Tax
• Wealth Tax
• Gift Tax
Direct Tax
• Goods and Services
Tax
• Custom Duty
Indirect Tax

5. 2018-19
2019-20
2020-21

6.  Previous Year: The year in which the income earned, is known as
previous year. (Income Year). Previous year is not always a
period of 12 month, because for newly set up business the period
starts from the date of commencement of business to 31st March,
2018.
 There are some exceptions (In some cases Income earned during
the previous year taxed in the same year) were as follows:
1. Income of Non Resident from shipping business.
2. Income of person leaving India for permanent basis or for longer
period.
3. Income from discontinued business.
4. Income of the person trying to transfer assets with a view to
avoid tax.
 Assessment Year: The year in which the tax is collected, it is
always a period of 12 months, starting from 1st April to 31st
March. It is also known as Tax Year.
Example: Previous Year is 2017-18, Assessment Year is 2018-
19

7. An Individual
Hindu Undivided Family
Company
Partnership Firm
Association of Person & Body of Individual
Local Authority
Any other Artificial Juridical Person

8. A person who is liable to pay tax or any sum of
money in this Act,1961 is known as Assessee.
This is divided into 3 categories:
1. Ordinary Assessee
2. Deemed Assessee
3. Assessee in default

9. The total of 5 Heads is known as GTI.
Income from Salary.
Income from House Property.
Income from Business & Profession.
Income from Capital Gain.
Income from Other Sources.

10. All taxable
entities are
divided
into
following
categories:
Residential
Status
Resident
Ordinary
Resident
Not Ordinary
Resident
Non-
Resident

11. • The concept of Residential Status has nothing to do with
nationality or domestic of a person.
• An Indian, who is a citizen of India can be non-resident for
Income Tax purposes, whereas an American who is a citizen of
America can be Resident of India for Income Tax purposes.
• Residential Status of a person depends upon the territorial
connections of the person with this country , i.e. for how many
days he has physically stayed in India.
• The Residential Status of different types of persons is determined
differently . Similarly, the Residential Status of the Assessee is to
be determined each year with reference to the “Previous Year”.
• The Residential Status of the Assessee may change from Year to
Year. What is essential is the Status during the Previous year and
not in the assessment year.

12. Rules for Resident and Ordinary Resident
1. Stay in India for 182 days or more during the previous year
OR
1. a. 60 days or more in that relevant Previous Year.
b. Presence for 365 days during the Four preceding Previous Year.
 For Rule 1.a. 182 days is considered instead of 60 days in some cases:
• For Indian Citizen going abroad on a Job or as a member of crew of an Indian
ship.
• For Indian Citizens and Persons of Indian Origin.
2. a. Resident in India for 2 previous years out of 10 previous years preceding
the relevant previous year.
b. Resident in India for 730 days or more during seven preceding previous
years.

13. 1. X left India for the first time on 20th May,
2014. During the previous year 2016-17, he
came to India once on 27th May,2016 for a
period of 53 Days. Determine his residential
status for the assessment year 2017-18.
2. X comes to India for the first time, on 16th
April, 2017. During his stay in India up to 5th
Oct, 2019, he stays at Delhi up to 10th April,
2019 and thereafter remains in Chennai till
his departure from India. Determine his
residential status for the A.Y: 2020-21.

14. WN-1: Pre year =(2016-17)= 53 days
A} Resident:
1. An individual must be present in India for at least
182 days during the previous year= 53 days, NO
OR
1.a. An individual must be present in India for at least
60 days during the previous year= 53 days, NO
1.b. an individual must be present in India for at least
365 days during the 4 prec. Previous year=
780days, yes
Non Resident= Ass. Year 2017-18

15. WN-2: 4 preceding previous year
2015-16=0
2014-15=30+20=50days
2013-14=365
2012-13=365= 780days
1999-2000, 2003-2004, 2007-2008,2011-12,
2015-16, 2019-20

16. WN-1: Pre. Year 2019-20 =1st April, 2019-5th
Oct, 2019
A=30
M=31
J=30
Ju=31
A=31
S=30
O=5
188 days

17. A} Resident:
1. An individual must be present in India for at
least 182 days during the previous year=
188 days, yes
Resident = 2020-21
 An individual must be resident in India for at
least 2 years in 10 P.P.Y = 2 years, Yes
 An individual must be present in India for at
least 730 days during the 7 P.P.Y.= 715 days,
No
Not Ordinary Resident= AY=2020-21

18. Year Days 182 days
2018-19 365 days Yes = Resident
2017-18 350 days (365-15) Yes =Resident
715 days

19. 3. X was born in Chennai in 1992. later on he
migrated to Canada in June, 2012 and took
the citizenship of that country from 26th Dec,
2017. His parents were born in Bengal in
1960 but his grand parents were born in India
in 1946. He comes to India on 20th June,
2019 and stays in India up to 16th Dec, 2019.
During earlier 4 preceding previous years, he
was in India for 400 days. Find out his
residential status for the previous year 2019-
20.

20. WN-1:PRE. YEAR- 2019-20 RESIDENT:
J= 11 (30-19)
Ju= 31
A= 31
S= 30
O=31
N= 30
D= 16
180days
An Individual must be present
in India for at least 182 days
during the previous year.
180 days, No
Non- Resident= PY 2019-20

21. 4. X an Indian citizen, who is appointed as
senior taxation officer by government of
Nigeria, leaves India for the first time on
29th September, 2018 for joining his duties
in Nigeria. During the previous year 2019-
20, he comes to India for 176 days.
Determine his residential status for the
Ass. year 2019-20 and 2020-21.

22. WN-1- PRE. YEAR 2018-19 RESIDENT
A= 30
M= 31
J=30
Ju= 31
A= 31
S= 29
182 days
An Individual must be present in India
for at least 182 days during the pre.
Year. 182 days, Yes.
Resident= PY 2018-19
An individual must be resident in India
for at least 2 years in 10 PPY. 10
year, Yes
An individual must be resident in India
for at least 730 days during 7 PPY.
2557 days, Yes
Ordinary Resident= PY 2018-19

23. Year Days 182
2017-18 365 R
2016-17 365 R
2015-16 366 R
2014-15 365 R
2013-14 365 R
2012-13 365 R
2011-12 366 R = 2557 days in 7 PPY
2010-11 365 R
2009-10 365 R
2008-09 365 R

24. Pre Year = 2019-20= 176 days
An Individual must be present in India for at
least 182 days during the previous year.
176 days, No.
Non- Resident= AY 2020-21

25. 5. X is a foreign citizen. During the previous year
2019-20, he came to India for 70 days. Determine
his residential status for the A.Y. 2020-21 on the
assumption that during the financial year 2005-06
to 2018-19, he is present in India as follows:
Year Days Year Days Year days
2018-19 100 2017-18 80 2016-17 60
2015-16 126 2014-15 80 2013-14 70
2012-13 23 2011-12 181 2010-11 90
2009-10 71 2008-09 4 2007-08 8
2006-07 55 2005-06 298

26. RESIDENT
1. An Individual Must be present
in India for at least 182 days
during the pre. Year. 70 days,
No
OR
2. a. An Individual must be
present in India for at least
60 days during the prev.
years. 70 days , Yes
b. An individual must be present
in India for at least 365 days
during the 4 PPY. 366 days,
Yes
Resident= AY=2020-21
ORDINARY RESIDENT
1 an individual must be
resident in India for at least
2 years in 10 PPY. 2years,
yes
2. An individual must be
resident in India for at least
730 days in 7 PPY.
539days, No
Resident but not Ordinary
Resident = AY=2020-21

27. Year Days 182 60 365 R/NR
2018-19 100 No Yes 346,No NR
2017-18 80 No Yes 336, No NR
2016-17 60 No Yes 299, No NR
2015-16 126 No Yes 354, No NR
2014-15 80 No Yes 364, No NR
2013-14 70 No Yes 365, Yes R
2012-13 23= 539 day No No 346, no NR
2011-12 181 No Yes 173, No NR
2010-11 90 No Yes 138, no NR
2009-10 71 No Yes 365Yes R
2008-09 4
2007-08 8
2006-07 55
2005-06 298

28. 1. An individual must be resident in India for
at least 2 years in 10 PPY. 2Years, Yes
2. An Individual must be resident in India for
at least 730 days in &PPY. 539 days, NO
Not Ordinary Resident= P.Y 2019-20

29. Concept:
Indian Income:
Any Income arise or accrue or deemed to arise or accrue in India is taxable to
all residential status..
Any income received or deemed to receive in India is taxable to all residential
status.
Foreign Income:
Any income arise outside India, but business controlled from India then that
Income is taxable to Ordinary Resident and Not ordinary Resident.
Any Income which is received or accrue outside India, business controlled from
outside India only taxable to Ordinary Resident.
Notes:
1. Any dividend received from Indian company is fully exempted.
2. Any untaxed profit of previous year is not taxable.
3. Gift received from relative is fully exempted.

30. Compute Income for Mr. Hari for the Pre. Year 2019-20.
(a) Salary accrued and received in India Rs.1,50,000.
(b) Profit from hotel business in UK Rs.2,00,000.
(c) Dividends declared in China received in India Rs.40,000.
(d) Gain from transfer of capital asset in India Rs.75,000.
(e) Interest on Debentures of a company in Canada received in
India Rs.18,000.
(f) Royalty received in Australia from a resident in India for
technical services provided for a business in Australia
Rs.60,000.
(g) Interest received in Germany from Mr. Clary, a non-resident, on
loan provided to him for business in India Rs.20,000.
(h) Fees from an Indian company carrying on business in the USA
for technical services rendered in New York, directly deposited
in his bank account in India Rs.45,000.
Compute the Gross Total Income of Mr. Hari for the relevant
Previous Year 2019-20 (A.Y. 2020-21),
if he is (i) Ordinarily Resident, (ii) Not Ordinarily Resident, (iii) Non
Resident

31. Case OR NOR NR
Income received in India 1,50,000 1,50,000 1,50,000
Income arise outside India 2,00,000 - -
Income received in India 40,000 40,000 40,000
Income arise in India 75,000 75,000 75,000
Income received in India 18,000 18,000 18,000
Foreign Income 60,000 - -
Income arise from India 20,000 20,000 20,000
Income received in India 45,000 45,000 45,000
Gross total Income 6,08,000 3, 48,000 3, 48,000

32. Mr. Khan discloses following particulars of his receipts during the Previous Year
2019-2020:
a. Salary income earned at Surat but received in USA Rs. 4,00,000.
b. Profits earned from a business in China which is controlled in India, half of the
profits being received in India Rs. 2,00,000.
(c) Income from property, situated in UK and received there Rs. 50,000.
(d) Income from agriculture in Africa and brought to India Rs. 1,20,000.
(e) Dividend-paid by an Indian company but received in Italy on 15th May, 2019 Rs.
50,000.
(f) Interest on USA Development Bonds, one half of which was received in India Rs.
1,00,000.
(g) Past foreign untaxed income brought to India Rs. 80,000.
(h) Gift of $1000 from father, settled in USA, received in India Rs. 1,60,000.
(i) Capital Gains on sale of Land in Udaipur, consideration received in Australia Rs.
4,00,000.
(j) Income from structure-designing consultancy service, set up in Japan, controlled
from India, profits being received outside India Rs. 5,00,000.
(k) Loss from foreign business, controlled from India, sales being received in India
Rs. 1,00,000.
Determine his Gross Total Income for the Previous Year 2019-2020 if he is
(i) Resident and Ordinarily Resident, (ii) Resident but not Ordinarily Resident,
(iii) Non Resident.

33. Sr.
No
Particulars OR NOR NR
1 Salary accrue in surat 4,00,00
0
4,00,00
0
4,00,00
0
2. Foreign Income
(a) Controlled from India
2,00,00
0
2,00,00
0
Nil
(b) Half received in India 2,00,00
0
2,00,00
0
2,00,00
0
3. Income from property in UK received in
UK
50,000 Nil Nil
4. Agriculture Income from Africa Brought
to India
1,20,00
0
Nil Nil
5. Dividend from Indian Company F. E. F.E F.E.
6. (a)Interest on US development Bond 1,00,00
0
(b) Income received in India 1,00,00
0
1,00,00
0
1,00,00
0
7. Past foreign untaxed Income F.E. F.E. F.E.
8. Gift from father F.E. F.E. F.E.

34. Sr.
No
Particulars OR NOR NR
10. Income from Japan received
outside India but profession
controlled from India
5,00,000 Nil Nil
11. Loss from business (1,00,000) (1,00,000) (1,00,000)
Gross Total Income 19,70,000 11,00,000 10,00,000

35. 1. Where the total Income does not exceeds Rs. 2,50,000 Nil
2. Where the total income exceeds Rs. 2,50,000 but does not
exceed Rs. 5,00,000
5%
3. Where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
20%
4. Where the total income exceeds Rs. 10,00,000 30%

36. 1. Where the total income does not exceeds Rs. 3,00,000 Nil
2. Where the total income exceeds Rs. 3,00,000 but does not
exceeds Rs. 5,00,000
5%
3. Where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
20%
4. Where the total income exceeds Rs. 10,00,000 30%

37. 1. Where the total income does not exceeds Rs. 5,00,000 Nil
2. Where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
20%
3. Where the total income exceeds Rs. 10,00,000 30%