: For Finance Professionals & Students

Provisions for Deciding factors of residential status and taxability

Posted by  

For determining the taxability of the income residential status must be seen first.

because the taxability of income depends upon the residential status of person.

Following is the situations when the taxability of income depends on the status of person

First:- what is the residential status of the person as per the Income-tax Act 1961.and the second is the nature of income he/she earned.

this residential status of person play a important role while deciding the taxability in hand .

There are different class available i.e. Resident person,Non Resident person,and the Resident but not ordinary resident person.

The Process must be done every year to decide that the person is Resident,NRI,or other one.because every year according to income tax act ,1961 his/her
status may be change according the stay period in india.A person can be Resident in one year and NRI in next year.

Residential status can not be seems like citizenship.It does not mean that the person is indian citizen so he also Resident of india.It can only be decide through by income tax own sets of rules regarding this.

A person can be treated as a resident in India if he satisfies certain specified conditions in this regard under the Income-tax Act 1961.

As Per income tax Huf is also a person so while deciding the residential status of HUF same rules will applicable on Karta.

Now the next question is this that how we can decide that what is residential status of person in a particular year to calculate the taxability…

In our First step we first calculate that he/she is resident or not .

If He/she is resident then in next step we calculate his/her status of NRI or Not ordinay status.

Leave a Reply

Your email address will not be published. Required fields are marked *

© 2014, all rights reserved at