Income Tax
INCOME TAX NOTES
Residential Status and Incidence of Tax
According to Section 5 of the Income Tax Act the scope of total Income of an assessee depends on his residential status.On the basis of residential status assessee are classified under the following two categories: 1. Resident 2. Non-resident.
As per as resident individuals and Hindu Undivided Families are concerned, they can be further divided into two categories: 1. Ordinarily Resident 2. Not ordinarily Resident.
Residential Status of an Individual
The Conditions or rules for determining the residential status of an individual may be suitably classified in the following two categories: 1. Basic Conditions 2. Additional Conditions.
1. Basic Conditions:
(i) If the assessee resided in India in the Previous year for a period or periods amounting in all to 182 days or more. It is not necessary that the assessee should stay in India continuously or at one place only. (ii) If the assessee resides in India for a period or periods amounting in all to 365 days or more within the four years immediately preceding the previous year and he resides in India for 60 days or more in the previous year.
Exceptions:
In the following cases, stay of an assessee in India [with reference to condition (ii) mentioned above] during the previous year for 182 days will be necessary in place of 60 days:
(i) An Indian citizen who leaves India in any previous year as a member of the crew of an Indian ship. (ii) An Indian citizen who leaves India in any previous year for the purpose of employment. (iii) Person of Indian origin or a citizen of India who resides outside India comes on a visit to India in any previous year.
2. Additional Conditions:
(i) If the assessee has been resident in India in at least 2 out of 10 year immediately preceding the previous year, and (ii) If the assessee has, during the seven years immediately preceding the previous year, been in
Residential Status and Incidence of Tax
According to Section 5 of the Income Tax Act the scope of total Income of an assessee depends on his residential status.On the basis of residential status assessee are classified under the following two categories: 1. Resident 2. Non-resident.
As per as resident individuals and Hindu Undivided Families are concerned, they can be further divided into two categories: 1. Ordinarily Resident 2. Not ordinarily Resident.
Residential Status of an Individual
The Conditions or rules for determining the residential status of an individual may be suitably classified in the following two categories: 1. Basic Conditions 2. Additional Conditions.
1. Basic Conditions:
(i) If the assessee resided in India in the Previous year for a period or periods amounting in all to 182 days or more. It is not necessary that the assessee should stay in India continuously or at one place only. (ii) If the assessee resides in India for a period or periods amounting in all to 365 days or more within the four years immediately preceding the previous year and he resides in India for 60 days or more in the previous year.
Exceptions:
In the following cases, stay of an assessee in India [with reference to condition (ii) mentioned above] during the previous year for 182 days will be necessary in place of 60 days:
(i) An Indian citizen who leaves India in any previous year as a member of the crew of an Indian ship. (ii) An Indian citizen who leaves India in any previous year for the purpose of employment. (iii) Person of Indian origin or a citizen of India who resides outside India comes on a visit to India in any previous year.
2. Additional Conditions:
(i) If the assessee has been resident in India in at least 2 out of 10 year immediately preceding the previous year, and (ii) If the assessee has, during the seven years immediately preceding the previous year, been in