Residential status

Residential status

• 1.
  RESIDENTIAL STATUS AND INCIDENCE OFTAX Presented By: MAMTA BHOLA [M.Com (Business Innovations), B.Ed, UGC-NET] (Assistant Professor, Department of Commerce and Management, Arya College Girls Section, Ludhiana) Subject: Income Tax Law [B.Com III (5th Semester)]
• 2.
  How will youdetermine the residential status of an assessee?
• 3.
  Citizen Resident
• 4.
  Assessment Year 2021-22 RelevantPrevious Year 2020-21 • Previous years preceding the relevant previous years will be 1. 2019-20 2. 2018-19 3. 2017-18 4. 2016-17 5. 2015-16 6. 2014-15 7. 2013-14 8. 2012-13 9. 2011-12 10.2010-11
• 5.
  Residential Status of IndividualAssessee Resident [Section 6(1)] Ordinary Resident Not- Ordinary- Resident Non Resident [Section 2(30)]
• 6.
  Resident [Section 6(1)] Oneof the following conditions should be fulfilled by an individual assessee to become the Resident of India for any Assessment Year: • He must stay in India for the period of 182 days or more during the relevant previous year. Or • He must stay in India for the period of 365 days during the 4 previous years preceding to relevant previous year and 60 days during the relevant previous year.
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  ORDINARY RESIDENT • Hemust be the resident of India for 2 out of 10 previous years preceding to relevant previous year. And • He must stay in India for the period of 730 days or more during the 7 previous years preceding to relevant previous year.
• 8.
  NOT ORDINARY RESIDENT •He was non resident of India for 9 out of 10 previous years preceding to relevant previous year. OR • He must stayed in India for the period of 729 days or less during the 7 previous years preceding to relevant previous year.
• 9.
  NON RESIDENT [Section2(30)] When assessee has not fulfilled any condition of section 6(1) then he becomes the non resident of India for that previous year.
• 10.
  Q. Mr. Ram,an Indian citizen leaves India for the first time on 31st May, 2015 and comes back on 15th May, 2018. he again leaves India on 10th June, 2019 to come back on 14th January, 2020. He is living in India since then. Determine his residential status for the previous year 2019-20. • Previous Year 2019-20 (1-4-2019 to 31-3-2020) Assessment Year 2020-21 • Stay in India in Previous Year From 1-4-2019 to 10-6-2019 71 days From 14-1-2020 to 31-3-2020 78 days Total 149 days Test a) Section 6(1) is not fulfilled i.e. 182 days or more. (Not fulfilled) Test b) i.e. 60 days in relevant previous year and 365 days in 4 previous years preceeding the relevant previous year. (Fulfilled) 2018-19 (15-5-2018 to 31-3-2019) 322 days 2017-18 not in India 2016-17 not in India 2015-16 1-4-2015 to 31-5-2015 61 days Total 383 days
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  Residential Status • Heis resident as he fulfills the 2nd condition of section 6(1) • He becomes the ordinary resident As He is resident of India for more than 2 years in the previous years preceeding the relevant previous year And He was living India for more than 730 days in India during 7 previous years Preceeding the relevant previous year.
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  Residential Status ofHUF Resident [Section 6(2)] Ordinary Resident Not- Ordinary- Resident Non Resident [Section 2(30)]
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  Resident [Section 6(2)] Resident(HUF) = Control and management of affairs in India (wholly or partially)
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  ORDINARY RESIDENT • Karta mustbe the resident of India for 2 out of 10 previous years preceding to relevant previous year. And • Karta must stay in India for the period of 730 days or more during the 7 previous years preceding to relevant previous year. NOT ORDINARY RESIDENT • Karta was non resident of India for 9 out of 10 previous years preceding to relevant previous year. OR • Karta must stayed in India for the period of 729 days or less during the 7 previous years preceding to relevant previous year.
• 15.
  NON RESIDENT [Section2(30)] HUF shall be non-resident in India if the control and management of affairs is situated wholly outside India.
• 16.
  Residential Status of Company Resident [Section6(3)] Non Resident [Section 2(30)]
• 17.
  Resident [Section 6(3)] a.It is an Indian company. b. Its place of effective management in that year, is in India.
• 18.
  INCIDENCE OF TAX DifferentKinds of Incomes Resident / Ordinary Resident Not Ordinary Resident Non-Resident 1. Income received or deemed to be received in India Taxable Taxable Taxable 2. Income earned in India whether received in or outside India Taxable Taxable Taxable 3. Income earned and received outside India from a business controlled or profession set-up in India. Income may or may not be remitted to India Taxable Taxable Not 4. Income earned or received outside India from a business controlled or profession set up outside India Taxable Not Not 5. Income earned and received outside India from any other source (Except income under point 3) Taxable Not Not 6. Income earned and received outside India in the years preceeding the previous year and if the same is remitted to India during current previous year Not Not Not
• 19.
  THANK YOU.