Residential Status of an asset

person

firm ,company,AOP,BOI,e
individual and HLF
ts.

Rersident Non-resident Resident in India Non Resident

Ordinarily Resident in Non Ordinarily resident

India in india

 Residential status of an individual-

An individual can be a resident or non resident . a resident can be an ordinarily
resident.or non ordinarily resident.

There are two sets of conditions-

1. Basic conditions
2. Additional conditions

Resident -an individual becomes a resident in India ,if he satisfies at least one one of the
basic conditions. If an individual doesn’t satisfy any of the basic condition , he is a non
resident.

Ordinarily resident- if a resident satisfies both the additional conditions , he is a resident

and ordinarily resident.

Non ordinarily resident- If a resident does not satisfy any of the additional conditions ,or
satisfies only one of the basic condition ,then he is a resident but not ordinarily resident.

 Residential status of a Hindu Undivided Family –

Resident- An HUF is resident in India if the control and management of the affairs
of the business is wholly in india. Or a partly in india and partly outside of india.
 a resident HUF is either ordinarily resident or not ordinarily resident.

Ordinarily resident- A resident HUF is ordinarily resident in india if Karta or

manager of family satisfies the following two conditions
1. He has been resident of india for the atleast 2 out of 10 previous year,
immediately proceding the relevant previous year
2. He has been present in india for a period of 730 days or more during 7 years
immediately proceding of previous years

Residential status of a Firm, Company, AOI, BOI, etc.-

Resident- If the control and management is wholly outside in India ,all these persons
are non resident except in Indian company, which is resident even when the control and
management is wholly from outside of india.

Insidence of tax- whether a particular source of income is taxable or not. Depends on

the residential status of a person. The incidence of tax is presented in following table.

Nature of Income Resident and Resident but not Non resident

ordinarily ordinarily
Resident Resident

Income accrued or deemed to Taxable Taxable Taxable

be accrued and received or
deemed to be received in india

Income accrued outside india Taxable Taxable Taxable

but deemed to be received in
india

Income accrued or deemed to Taxable Taxable Taxable

be accrued in india but received
outside india

Income accrued and received Taxable Taxable Not Taxable

outside india from a business
controlled or profession setup in
india.
Income accrued and received Taxable Not Taxable Not Taxable
outside india from a business
controlled or profession setup
outside india.
Income accrued and received Taxable Not Taxable Not Taxable
outside india in the P.Y.
Income accrued and received in Not Taxable Not Taxable Not Taxable
indiain any year proceding the
P.Y. and later on remitted to
india in current financial year.