Easy way to learn Residentail status

I am  presenting here with an easy way to solve all the residential status problems. Following are the some of the basic tips to do the same

 How to prepare a residential status problem in taxation.

• Most of the cases, an Assessee will satisfy the Second Basic condition (60 days during the PY and 365 days during the preceding 4 PY)
• Second additional condition will also satisfied by the Assessee in most of the cases. (He must be resident for a minimum 729 or less during 7 preceding PY). There is a positive correlation between Second basic condition and second additional conditions. Assessee may satisfy the first additional condition also.
• Calculate the period of stay in various pervious year.
• Example

·        Sushma furnish the following information about her period of stay in India during 2000-01 to 2010-11

Solutions

          Checking with basic conditions

• Sushma satisfies the second basic condition of resident.(60 days during the PY and 365 days during the preceding 4 PY)

          100 Days during 2010-11 and 375 days before 4 Preceding PY.(178+65+62+70)

     She is a resident since satisfies second basic condition.

    Checking with additional condition

• Period of stay during the preceding PY  7 years amounting to 617 days       ( 70+62+65+178+67+75+110)

Conclusion

Resident but not ordinary resident.

Reason

Satisfies the basic condition of resident and also satisfies the additional condition

      Example 2

Mr C, who is a citizen if Singapore has stayed in India for a period of 150 days during the previous year 2010-11. You are informed that Mr C stayed in India throughout the financial year 2006-07. However, he stayed in his home country for 330 days and 350 days during 2004-05 and 2002-03 respectively. Determine his residential status for the AY2011-12.

Solution

Period of stay is not given directly since we have to first calculate the period of stay.

He is a Singapore citizen so that he is NRI. Period of stay in Home country is given and balance period is assumed to have stayed in India (365-330=35 and 365-350=15)

Checking with basic conditions

Mr C, who is satisfy the second basic condition (150 days during the PY and more than 365 days during the 4 years proceeding previous periods).

    Checking with additional condition

Mr C satisfy the first additional condition since he is NRI in 9 out of 10 Preceding PY

Also satisfy the second additional condition since the period of stay during the preceding 4 previous year is less than 729 days ( total periods of stay = 565 days)

Conclusion

Resident but not ordinary resident.

Reason

Satisfies the basic condition of resident and also satisfies both of  the additional condition

       Example no 3

1.    Mr Shane Warne, a foreign national, visited in India for the first time during 2006-07 and stayed 150 days. During the subsequent years 2007-08, 2008-09, 2009-10 and 2010-11 his stays in India was for 40 days, 90 days, 105 days and 70 days respectively. Determine his Residential status for the Assessment year 2011-12

     Calculation of period of stay

Checking with basic conditions

Shane Warne satisfy the second basic conditions regarding to resident since his period of stay during the previous year is  more than 60 days during the previous year and also more than 365 days during the PY.(70 days during the PY and 385 days during 4 preceding PY)

Checking with additional condition

Shane Warne is an NRI during 9 out of 10 preceding PY so he is satisfy the first additional condition.

His period of stay during the 7 preceding PY is less than 729 days ( overall period of stay amounting to 455 days)

Conclusion

Resident but not ordinary resident.

Reason

Satisfies the basic condition of resident and also satisfies both of  the additional condition