UNIT-19, INCOME TAX
RESIDENTIAL STATUS
The tax liability under income tax is determined on the basis of residential status of an assesse but not according to the citizenship hence it becomes necessary that firstly the residential status of an assesse should be determined.
On the basis of residential status there are 3 categories of assessees:
1. Resident/Ordinary resident
2. Not ordinarily resident
3. Non resident
There are separate rules for different types of assessee like; individual, H.U.F., firm, companies etc. for determination of residential status.
Individual Assessee
Resident / Ordinary Resident : - If an individual wants to become resident in India, then he has to fulfill the basic condition as well as two additional conditions:
1).Basic conditions: In the basic conditions, there are two conditions. On satisfying any one of these, it will be assumed that the basic condition is satisfied.
The assessee must have lived for at least 182 days in India during the previous year.
OR
The assessee must have lived for at least 365 days in 4 years preceding the previous year and at least 60days in 4 years preceding the previous year.
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