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    Day 5

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    nan.singh1904

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    Day 5

    Uploaded by

    nan.singh1904
    4 views3 pages

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    4 views3 pages

    Day 5

    Uploaded by

    nan.singh1904

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Internship Report

    ( Day 5 of internship)

    Name : Nancy Singh

    Residential status of HUF

    Resident : a HUF will be resident of India if the control and management of it’s affairs is
    situated wholly or partly in India.

    Non – resident : if the control and management of its affairs is situated wholly outside
    India, it would become a non-resident.

    Additional term :

    Control and management – this term is referred under Sec 6 , which means de facto control
    and management and not merely having the right to control or manage. It refers to the
    authority and responsibility of the Karta to manage the affairs even from outside India.

    ❖ RoR / RNoR : if the karta fulfills both the given conditions, then resident HUF will be
    resident and ordinary resident, if not, then it will be resident but not ordinary
    resident.
    i. In any 2 previous years ,if the karta holds the status of a resident out of last
    10 previous years excluding current previous year, or,
    ii. Stay of karta during last 7 years excluding current previous year should be
    730 days or more.

    Residential status of Firms, AoPs and BoIs

    Resident : a firm / AoP / BoI would be a resident of India if the control and management of
    it’s affairs is wholly situated in India.

    Non – resident : a firm /AoP / BoI would be a non resident, if the control and management of
    its affairs is wholly situated outside India.

    Residential status of Companies

    A company would be resident in any previous year, if


    • It is an Indian company, or
    • It’s place of effective management, in that year, is in India.

    Residential status of Local authority and artificial judiciary

    Resident : local authorities and artificial juridical persons would be resident of India , if the
    control and management of its affairs is situated wholly or partly in India.

    Non – resident : local authorities and artificial juridical persons would be non resident of
    India, if the control and management of its affairs is situated wholly outside India.

    Scope of Total Income

    The scope of total income of an assessee depend on the following 3 important


    considerations :

    • the residential status of the assessee,


    • the place of accrual or receipt of income, whether actual or deemed; and
    • the point of time at which the income had accrued to or was received by or on
    behalf of the assessee.

    The ambit of total income of the 3 classes of assessees would be as follows:

    1. Resident and Ordinarily resident


    The total income of an ROR would, under section 5(1), consist of:
    • Income received or deemed to be received in India during the previous year;
    • Income which accrues or arises or is deemed to accrue or arise in India
    during the previous year; and
    • Income which accrues or arises outside India even if it is not
    received or brought into India during the previous year.
    2. Resident but Nor Ordinary resident

    Under section 5(1), the total income of an RNOR would consist of –

    • Income received or deemed to be received in India during the previous year;


    • Income which accrues or arises or is deemed to accrue or arise in India
    during the previous year; and
    • Income derived from a business controlled in or profession set up in India,
    even though it accrues or arises outside India.
    3. Non – Resident
    A non-resident’s total income under section 5(2) includes:

    • Income received or deemed to be received in India in the previous year; and


    • Income which accrues or arises or is deemed to accrue or arise in India
    during the previous year.

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