28 November 2013
my question is under this whenever we r going to determine the residential status so wht type of conditions is there which should be fulfill by person ??
28 November 2013
RESIDENTIAL STATUS OF AN INDIVIDUAL UNDER THE INCOME TAX ACT, 1961
Tax incidence depends upon residential status of a person. Residential Status has been categorized in three broad categories 1. Resident 2. Not Ordinarily Residents 3. Non-Resident
In other words we can say that Residents are of two types-
1. Ordinary Residents and 2. Not Ordinarily Residents.
For deciding the Residential Status of an Individual assessee, two basic and two additional conditions are required to be applied and Status is decided on the basis of conditions satisfied.
Basic Conditions ----------------- 1. He has been in India during the previous year for a total period of 182 days or more. 2. He has been in India - during the previous for at least 60 days, and in 4 IPPYs* at least a total period of 365 days. . *IPPY-Immediately preceding previous year
Additional Conditions --------------------- 1A. He is a resident in any 2 out of the 10 IPPYs. 2A. His total stay of 730 days or more in 7 IPPYs
** How the Basic and Additional conditions are applied ?
Step-1 Deciding Resident or Non Resident ------------------------------------------ *Situation A - None of the Basic Conditions is Satisfied . Conclusion : ------------- The Assessee is a Non-Resident . (Step 2 is not required in this case, test is over) . *Situation B : -------------- Basic Condition 1 or 2 or both satisfied. . Conclusion ---------- The Assessee is a Resident.
( Test will go ahead. Step 2 is Required for deciding whether he is an ordinary resident or not-ordinarily resident.) . Step-2 – Application of Additional ------------------------------------ Conditions to Residents. ------------------------ (applicable only to Residents for deciding whether the Resident is Ordinary Resident or Not Ordinarily Resident) . * Situation -1 : ----------------- Additional Conditions Satisfied : None or 1A or 2A . Conclusion ---------- The Assessee is a Not Ordinarily Resident . * Situation -2 : ----------------- 1A & 2A both are satisfied. . Conclusion ------------ The Assessee is a Resident.
Exceptions or Special Conditions: (Applicable to Citizens of India and POIs)
Exceptions 1. Indian Citizen leaving India for an employment outside India or As a member of the crew of an Indian Ship. .
Only Basic Condition 1 of 182 days is applicable in this case. Basic Condition 2 is not required to be applied in such a case.
Anita left India for an employment on 25-09-2013, She remained for a period of 178 days in India during the previous year. . She will be NRI for The Asst. Yr. 2014-15 provided she doesn’t come back prior to 30-03-2009. . 2. An Indian citizen or a “Person of Indian Origin”* engaged outside India, in an employment or business, or profession or in any vocation comes on a visit to India in any previous year. . Only Basic Condition 1 of 182 days is applicable in this case. Basic Condition 2 is not required to be applied in such cases. .
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