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Residential Status Section 6.

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June 5, 2021 |

3 mins read

Bird’s Eye view of the ‘Residential Status- Section 6’

Concept of taxation Non-Resident Taxation
Provision of Income Tax Act, 1961 Section 6- Residential Status

Residential Status Section 6 – The quantum and applicability of tax on a person, depends upon the Residential Status of such person. Under the Income Tax Act, 1961 : –

  • Person who are resident and ordinarily resident for income tax purpose  are liable to pay tax on their global income (i.e., Indian income and foreign income).
  • Person who are resident but not ordinarily resident in India are liable to pay tax on Indian sourced income, and following foreign income : –
    – Business income where business is controlled wholly or partly from India.
    – Income from profession which is set-up in India.
  • Person who are non-resident are taxable only for their Indian sourced sourced income.

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Residential Status Section 6

As discussed above, taxpayers  are classified as resident or  non-resident for tax purpose. In case of individuals and HUF, resident taxpayers are further categorised as : –

  • Resident and ordinarily resident; and
  • Resident but not ordinarily resident.
  • Non Resident

Residential Status Section 6

Let us look at the Residential Status of each of the category of Person :-

For any queries, please write them in the Comment Section or Talk to our tax expert

Arinjay Jain

Bio of author

Arinjay is a Chartered Accountant with more than 20 years of post-qualification experience. He worked as Director, in the M&A Tax Division at KPMG in India. Presently, he is advising several MNCs in UAE on Economic Substance Regulations and impact of the UAE Corporate Tax Law on their business and clients across globe on International Tax issues . He is a well recognised Trainer of International Tax and UAE Corporate Tax. The areas of service include the following : - Advise and Compliance relating to International Tax Issues; Advise relating to UAE Corporate Tax Issues; Advise and Compliance relating to UAE Economic Substance Regulations; Advise and Compliance relating to Indian Income Tax Issues; Other connected matters from a Regulatory perspective.

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