Home Income Tax Assesment Residence in India-Section 6

Residence in India-Section 6

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Residence in India-Section 6

Individual-Section 6(1)

An individual is said to be resident in India in any previous year, if he—

  • Is in India in the relevant previous year for a period amounting in all to 182 days or more, or
  • Has been in India for a period of 365 days or more in immediately preceding 4 years and is in India for 60 days or more during the relevant previous year.

Exception to point no. (ii) above:

  • In the case of an individual being a citizen of India, who leaves India in any previous yearas a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958, or for the purposes of employment outside India, for the word “60 days” in point (ii), occurring therein, the words “182 days” had been substituted ;
  • In the case of an individual being a citizen of India, or a person of Indian origin, who, being outside India, comes on a visit to India in any previous year, for the word “60 days” in point (ii), occurring therein, the words “182 days” had been substituted.

Member of the crew of a foreign bound ship -Explanation 2 [Inserted by the F.A. 2015 w.e.f. 01-04-2015]

For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.

  • Rule 126 has been notified for the purpose of determination of residence in the case of individual citizen of India who is a member of the crew of a foreign bound ship leaving India.

 

Rule 126

(1). For the purposes of clause (1) of section 6, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, not include the period computed in accordance with sub-rule (2).

(2). The period referred to in sub-rule (1) shall be the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.

Explanation: For the purposes of this rule,-

(a) “Continuous Discharge Certificate” shall have the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum- Seafarer’s Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958;

(b) “eligible voyage” shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where-

(i) for the voyage having originated from any port in India, has as its destination any port outside India; and

(ii) for the voyage having originated from any port outside India, has as its destination any port in India.’

HUF, Firm, AOP- Section 6(2)

A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

Company-Section 6(3)  [w.e.f. A.Y. 2016-17]

When company is treated as resident in India

A company is said to be resident in India in any previous year, if—

(i) it is an Indian company; or

(ii) its place of effective management, in that year, is in India.

Explanation.—For the purposes of this clause “place of effective management” means a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole, are in substance made.

Before being substituted by the F.A. 2015, Section 6(3) was as under-Earlier provision for determination of residence of company

A company is said to be resident in India in any previous year, if—

(i) it is an Indian company ; or

(ii) during that year, the control and management of its affairs is situated wholly in India.

Any other Person-Section 6(4)

Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

Not ordinarily resident-Section 6(6)

A person is said to be “not ordinarily resident” in India in any previous year if such person is—

  • an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
  • a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.
  • Therefore, for becoming Ordinarily Resident, criteria is

-Resident in 2 years or more out of 10 preceding previous years or,

-Total stay in India is 730 days or more in preceding 7 years.

-Concept of NOR is applicable in case of individual or HUF only.

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