Suraj R. Agrawal

Resident A Hindu undivided family, firm, or association of persons etc. is resident in India if the control and management of its affairs is situated wholly or partly in India. But if the control and management is situated wholly outside India, then, a HUF, Firm, AOP etc. is to be regarded as non-resident. Since partial control is sufficient for the purpose of being resident, these forms of person may have in law two places of residence. The residence of partners or of individual members of a Hindu undivided family or association of persons is immaterial for the purpose of determining the residence of the firm or the family or AOP except in so far as such residence affects the control and management of the affairs of the firm or the family. The residence of partners in India normally raises the presumption that the firm is resident in India, but the presumption may be rebutted by showing that the control and management of the affairs of the firm is situated wholly outside India. Not Or...

An individual is taxed as ‘not ordinarily resident’ if he fulfills any of the two alternative conditions laid down in clause (6)(a) of section 6 i.e. (i) he has been non-resident in India in nine out of the ten previous years preceding the relevant previous year; or (ii) he has during the seven previous years preceding that year been in India for a period aggregating to 729 days or less. Also, as inserted w.e.f. assessment year 01.02.2021, a citizen of India who is deemed to be resident in India under clause (1A) or as per Explanation 1 to clause (1), an Indian citizen or a person of Indian origin visiting India and having total income, other than income from foreign sources (except income derived from a business controlled in or a profession set up in India), exceeding INR 15 lakhs during the previous year shall qualify as NOR in India, if his/ her stay is 120 days or more but less than 182 days in India during the previous year. In other words an Individual remains ‘Resident’ if both...

Clause (1) of section 6 lays down two alternative tests for an individual to qualify as ‘Resident’ in India; on satisfying either of them, an individual becomes Resident in India (excepting the cases covered by explanation): Test 1: Clause (1)(a) If during the relevant previous year, he is physically present in India for a period aggregating to 182 days or more ; or Test 2: Clause (1)(c) If he is physically present in India for a period aggregating to 365 days or more in the 4 immediately preceding years and 60 days or more in the relevant previous year . The aforesaid rule of residence is subject to exceptions. By virtue of Explanation 1(a) to section 6(1) in the case of an Indian citizen who leaves India in the relevant previous year as a member of the crew of an Indian ship as defined in section 3(18) of the Merchant Shipping Act, 1958 or for the purpose of employment outside India, the period of 60 days referred to in section 6(1) (c) will be extended to 182 days. Explanation 1(b) ...

The term “total income” has been defined in section 2 (45) of the Income-tax Act, 1961 (“the Act”) as, “the total amount of income referred to in section 5, computed in the manner laid down in the Act”. Therefore, while computing the total income, one has to have regard to the scope of income as specified in section 5 of the Act and then compute the income in the manner laid down in the Act. Section 5 prescribes scope of taxable total income for residents, not ordinarily residents and non-residents. Since the scope of taxable income and the tax liability varies with the residential status of the assessee it is important to determine the residential status of the assessee. The residential status has to be determined in accordance with section 6 of the Act. Scope of Total Income – Residents – Section 5 (1) Persons who are ‘Resident” are charged to tax on – (a) income received or deemed to be received in India in the accounting year, by or on behalf of such person, the date or place of it...