04-07-2012, 04:12 PM
Residential Status
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The determination of the residential status of a person is very significant in order to find out his tax liability.
RESIDENTIAL STATUS OF AN INDIVIDUAL
Under section 6(1) an individual is said to be resident in India in any previous year, if he satisfies at least one of the following basic
conditions—
(a) He is in India in the previous year for a period of 182 days or more
(b) He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year
EXCEPTIONS
In the following two cases, an individual needs to be present in India for a minimum of 182 days or more in order to become resident in India:
1. An Indian citizen who leaves India during the previous year for the purpose of taking employment outside India or an Indian citizen leaving India during the previous year as a member of the crew of an Indian ship.
2. An Indian citizen or a person of Indian origin who comes on visit to India during the previous year (a person is said to be of Indian origin if either he or any of his parents or any of his grand parents was born in undivided India).
ASSIGNMENT
Rickey Ponting, an Australian cricketer has been coming to India for 100 days every year since 1996-97:
(a) Determine his residential status for the assessment year 2009-10.
(b) Will your answer be different if he has been coming to India for 110 days instead of 100 days every year?
2. X was born in Lahore in 1946. He has been staying in England since 1970. He came to visit India on 2-10-2008 and returns on 30-3-2009. Determine his residential status for assessment year 2009-10.
3. A, a citizen of India left India on 6-6-1996 for employment abroad. He did not come to India upto previous year 2005-06. During 2006-07 and 2007-08, he visited India for 145 days and 195 days respectively. In the previous year 2008-09 he came to India on 7-4-2008 and left on 30-11-2008. Determine his residential status for assessment year 2009-10.
CONCLUSION
Thus it may be noted that income described in items (a) and (b) above are to be included in total income FOR all the three categories of the assessees in the same manner. The income described in item © i.e. income which accrue or arise outside India is:
(i) not includible in the total income at all in case the assessee is non-resident in India. -
(ii) includible in the total income in the case of resident but not ordinarily resident in India only when it is derived from a business controlled in or profession set up in india
Therefore, the incidence of tax is likely to be more in case of an assessee who is resident and ordinarily resident in India, a little less in case of a resident but not ordinarily resident in India and the least in case of non-resident in India if the assessee has various incomes both inside and outside India.