Residential status

1 Income shall taxable on the basis of

be
Residential status and not on the basis of
citizenship
2 Residential status shall be determined for
every py
3 If Any person become Resident then he is
liable to pay tax world income i e Indian
on
as well as foreign income but if person become
Non Resident then only Indian income shall be
taxable in the hands of assessee

Residential status of Individual

If Any individual satisfies Any one basic
condition then he is treated as Resident in
India otherwise Non Resident in India
aia isz days or more
during P 4
or
2 9 He must be in India for 60 day's or mo
during P 4
AND
b He must be in india for 365 days or more
during 4 years preceeding p.y

If individual become Resident in India

Any
then we have to check that such person is
Resident and ordinary Resident in India or
Resident but Not ordinary Resident
 If Assess ee satisfy Both the additional condino
then he is treated as Rand or otherwise R but NOR
Additional conditions
1 He must be in
India for 730 days or more during
7 Yean proceeding PY
AND
2 He must be Resident in India for at least 2Yea
out of 10 years proceeding pay

Other points
D In the following cases only first basic condition is
applicable for determination of Residential status
It means second basic condition shall be IGNORE
1 Indian citizen leaves India for the purpose of Job
Employment outside India
it Indian citizen being a crew member of Indian
ship leave India during P Y
iii Indian citizen or person of Indian origin engage
outside india in any employment or business or
profession and visiting India during P Y and his
income from Indian sources is 1500.000 in p y

Mpetfson of
Indian origin means assess ee him set
or his parents or his Grandparents were born in
undivided India
HOF Amended by FA 20
In case of Indian citizen or person of Indian orig
having income from Indian sources 15.00.000 then
2nd basic condition applicable and in sted of
60day's in PY 120 day's shall be considered
Note Amended by FA 20
Indian citizen or person of Indian origin havin
total income from Indian sources 31500.000 durin
P Y Who has been in India for a period 120 days
or more then he will be treated as R but Nor
Note Deemed Resident see 6 1A Amendedby FA 20
in case of Indian citizen having total income
from Indian sources 15.00.000 during P Y shall
be deemed resident in india in that P y if he
is not liable to pay tax in any other country or
territory by reason of his domicile or residence
or any other criteria of similar name
Deemed Resident always treated as R bu
NOR
Note
Indian citizen being a crew member while
computation Of No of day's stay in India follow in
time limit shall be excluded
from date enter in to the continious di schara
certificate in respect of joining the ship and endin
on the date entered in to continious discharge
certificate in respect of signing of the ship
Residential status of HUF sec 612

wn.fi Ritsargri
wholly outside
India
nonresident

if Karta satisfy

Both.si f
m n dinary
Resident Resident

Residential status of firm AOP sec 6 2

If control and management of

wn utside
Partly in India
India Non Resident
Resident
 Residential status of companies sec 6 3

In Foreign
company
company
Always
Resident
inna
e.nu
non resident

f Effective management means a

place where key management and commerce
decisions which are necessary for the condus
Of the business of an entity as a whole are in
substance made
 Scope Of Income secs

Incomey
Indian income foreign income
Indian income meant Income which is not an
1 Income Accrue or arise or deemed Indian income iscalled
tobe accrue or arise in India asforeignincome
OR
ii Incomereceived ordeemedtobe
received in India
OR
iii incomeaccrue received both
in India

Note
1
income accrued in India mean's source of income Generated in
India
2 income received in India mean's first receipt should be in India After

receivingincomeoutside India subsequently if it is remitted in to India then

it can not betreated as incomereceived in India
3 incomemay be in cash or kind
4 Anyincomealreadytax on accrualbasis consequently remitted to India is no

chargable to tax at the time of remittance irrespective of theresidentialstatus

5 sec 7 incomedeemedtobereceived inIndia
incomedeemed to bereceived in India means
Employercontribution torecognisedProvidentfund RPF in excess of
12.1 Of salary
Interest on recognised provident fund in Excess of 9.51
Employercontribution or central Govt contribution under a pension
 scheme referredUlssoccD
Amounttransferred from unrecognised Provident fund to recognised
providentfund

sec 9 income Deemed to Accrue Arise in India

1
salaryearned outside India
Pay Indian salary taxableinIndia
Indy
he Allowance
EXITED
India perquisites

Any person Pay salary taxable

armypersons

in India

2 Dividend from Indian company

Paid in India taxable
paidoutsideIndia Taxable
off In may 7
3 Income from
property Asset situated in India
Any income from property Asset situated in India then it is
treated as deemed to beaccrued or arise in India

4 Interest Income
Nonresident foreignco
Indian Govt

Resident
pay
Non Resident
Forbusinessor profession
carried in India
Interest
Deeme'd
toaccrue or arise
in India
 Not taxable in India
1 Int
paid by one NR to another NR for purposeotherthan business
2 Int paidby resident to XR for business outside India

5 Royalty
Indian Govt NonResident

Resident pay

for s
gsion affairs
Deemed toaccrue or arise in India

Note
1 Lumpsum royally by resident to NR for supply of computersoftware
alongwith computer hardware under the scheme approvedby ca shall
not betreated as deemed to accrue or arise in India E.g Compute or
Laptop with Microsoft

6 Fees for Technical services FTS

Indian Govt NonResident

Resident pay

Non Resident
Forbusiness profession
technical
carriedin India feesfor services

Deemedto accrue or arise in India

7 Gift made to a person outside India

Gift of any money made by resident to NR or foreigncompany
outside India shall be deemed to beaccrued or arise in India
8 incomeaccrue or arise in India throughanybusinessconnection in India

FollowingActivity shall not betreated as businessconnectionin India

i purchase of Goods in India forexport
i collection of news views in India fortransmission outside India
iii shooting of cinematograph Filmsin India

if such NR is individual who is not citizen of India IORT

a firmwhichdoes not have anypartner who is citizenof India Resident in
India or
a companywhichdoesnot haveanyshareholder who iscitizen Resident of Indi
in In case of a foreigncompany engaged in business of mining of diamonds

from theactivitieswhichareconfined to display of uncut andunassorteddiamon

in anyspecialzone notifiedby government
 Taxability of income for Individual Huf
income R OR RINOR NR
Indian income taxable taxable taxable

Foreignincome
income from business or taxable taxable as

professioncontrolled from India

the foreign Income taxable fastable fiftas

Taxability of income for other assessee

Income Resident NR
Indian income taxable taxable
foreign income Taxable Not Taxable