A Hindu Undivided Family is said to be resident in India in any previous year where the control and management of whole of its affairs is situated in India and also the karta of the family also situated within India in the previous year because it is the Karta who control and manage the family.
A Hindu undivided family whose manager has not been resident in India in nine out of the ten previous years preceding that year or has not during the seven previous years preceding that year been in India for a period of or period amounting in all to 730 days or more.
A Firm or Association of Persons is said to be resident in India in any previous year where the control and management of its affairs are wholly or partly situated within India during the relevant previous year. They are however treated non-resident in India, if control and management of whole of its affairs are situated wholly outside India.
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.
A Company said to be resident in India in any previous year if-
(i) It is an India company or Registration of the Company under Companies act 1956
(ii) The control and management of its affairs situated wholly in India.
S. 6(2): Residential status for HUF
- A HUF is said to be resident in India if its control and management is situated in India either wholly or partly during that previous year.
- A resident HUF is an ordinarily resident if the karta or manager of the family is a resident and ordinarily resident.
- A HUF is said to be ‘non-resident’ in India if its control and management is situated wholly outside India during that previous year.
- Control and management is situated at a place where the head/ brain, the seat of the directing power is situated.
S. 6(6)(b): Resident but not ordinary resident
- A HUF is said to be ‘non ordinarily resident’ in India in any previous year if its manager is treated as an ‘not ordinarily resident’ in India during that previous year.
S. 6(3): Residential status for a company
- A company is said to be ‘resident in India’ in any previous year if-
- It is an Indian company or
- During that year the control and management of its affairs is situated wholly in India.
- Thus an India company is always resident if control and management is in India or outside India.
- Foreign company is always resident if control and management of its affairs is situated wholly in India during that year.
- Control and management indicates the head and brain which direct the affair of the company in respect of its policy, finance, disposal of profit, management etc. i.e. place where the meeting of its BOD are held.
S. 6(4): Residential status of a firm or an association of person or every other person
- A partnership firm or an AOP or every other person is said to be a resident in India if the control and management of its affairs are situated in India either wholly or partly during that previous year.
- A partnership firm or an AOP or every other person is said to be non-resident in India if its control and management is situated wholly outside India during that previous year.
- “Control and management is situated at a place where the head or brain, the seat of the directing power is situated.”
Reference:
As Per Section 6, Of the Income Tax Act, 1961-
Residence in India.
6. For the purposes of this Act,—
(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.
(3) 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.34
Following clause (3) shall be substituted for the existing clause (3) of section 6 by the Finance Act, 2016, w.e.f. 1-4-2017 :
(3) A company is said to be a 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 business of an entity as a whole are, in substance made.
(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.