RESIDENTIAL STATUS OF AN ASSESSEE

PRESENTED TO : DR. KALPESH PRAJAPATI

PRESENTED BY : MR. AASMAN ACHARYA & MR. KEYUR DARJI

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INTRODUCTION

• The incidence of income-tax depends upon the residential status of an assesse. For instance, whether an income, accrued to an individual outside India or in India is taxable in India, depends on the residential status of an assesse, rather than on his citizenship.

• The determination of the residential status of a person is very significant in order to find out his tax liability.

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SALIENT FEATURES

• A person can have different residential status in different years.

• A person can have different residential status in different countries.

• In the same year an assesse can not have different residential status for different source of income.

• Residential status once decided, shall continue to be applied during the previous years under consideration.

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DIFFERENT TAXABLE ENTITIES

Following categories for the purpose of determining residential status:

• An Individual

• A Hindu undivided family

• A Company

• A Firm or an association of persons

• Every other Person

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DIFFERENT RESIDENTIAL STATUS

An assesse may be either :

• Resident in India, Or

• Non-Resident in India

However, a resident individual or a resident Hindu undivided family can either be:

• Resident and ordinarily resident in India, Or

• Resident but not Ordinarily resident in India

Therefore, a resident individual or a resident Hindu undivided family can either be:

• Resident and ordinarily resident in India

• Resident but not Ordinarily resident in India

• Non Resident

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BASIC CONDITIONS

1. He is in India in the previous year for a period of 182 days or more.

2. He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately proceeding the previous year.

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EXCEPTIONS FOR BASIC CONDITIONS

Take 182 days in place of 60 days if,

• An Indian citizen who leaves India during the previous year for the purpose of employment outside India.

• An Indian citizen who leaves India during the previous year as a member of the crew of an Indian ship.

• Indian citizen or a person of Indian origin who comes on a visit to India during the previous year.

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ADDITIONAL CONDITIONS

• He has been resident in India in at least 2 out of 10 previous years Immediately preceding the relevant previous year.

AND

• He has been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year.

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DETERMINING THE RESIDENTIAL STATUS

• Day of arrival in India & Day of departure of India both are included in calculation of stay in India.

• Stay in India includes the stay at territorial water boundary in India.

• Residential status is always determined for the P.Y. because we have to determine the total income of P.Y.

• Residential status of a person is to be determined for every P.Y. because it may change from year to year.

• A person may be a resident of more than one country for any P.Y.

• Citizenship of a country and residential status of that country are separate concept.

Thank You