Get to know about your Residential Status in India for the Income Tax Filing Purposes. It varies between Individual and a Company.
1. Individual: Residential status of an individual depends upon the number of days stay in India.
2. Company: Residential status in any other case depends upon the place of incorporation (in case of company) and place of control & management.
Purpose of the Status: Necessity for determination of residential status of a person is to decide the tax liability on the total income earned by that person in a financial year.
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An individual is said to be a resident of India, if he satisfies any one of the following two basic conditions
An individual is said to nonresident of India if he doesn’t satisfy both the basic conditions mentioned above.
While calculating the period of stay in India, stay need not be for a continuous period, aggregate period of stay even in breaks have to be considered, and stay can be at any place such as place of residence, business, etc.
There are certain exceptions to basic condition 2 where instead of 60 days 182 days will be considered while determining the residential status of following persons.
To determine whether an individual is resident and ordinarily resident (ROR) or resident and not ordinarily resident (RNOR) two additional conditions mentioned below must be checked.
An Individual is said to resident and ordinarily resident (ROR) if he satisfies any one of the basic condition and both the additional conditions mentioned above.
An Individual is said to resident and not ordinarily resident (RNOR) if he satisfies any one of the basic condition and doesn’t satisfy both the additional conditions mentioned above.
As said earlier above, the residential status of any other person other than individual depends upon the place of incorporation (in case of company) and place of control & management.
Control and management does not mean carrying out day to day business functions by servants, employees, or agents. It means the business may be done outside India and yet its control and management may be wholly with in India.
Control and management of a business is said to be situated at a place where the controlling and decision making power of the business is exercised.
A Company is Said to be resident in India if
|Place of Control||Indian Company||Company other than Indian Company|
|Wholly In India||Resident||Resident|
|Wholly outside India||Resident||Non Resident|
|Partly in India and Partly outside India||Resident||Non Resident|
A Firm or an AOP would be resident in India if the control and management of its affairs is situated wholly or partly in India.
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