Residential Status Section 6

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 :-

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