Section 1 - Transfer Pricing
- EVOLUTION OF TRANSFER PRICING IN INDIA – TRANSFER PRICING CA FINAL
- WHAT IS TRANSFER PRICING – CA Final Direct and International Tax
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – SECTION 92 – TRANSFER PRICING CA FINAL
- MEANING OF TRANSFER PRICE
- TRANSFER PRICING METHODS
- Comparable Uncontrolled Price Method
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – REPLACEMENT OF EXISTING LAW
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – APPLICABILITY OF ARM’S LENGTH PRINCIPLE
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – BASE EROSION CONCEPT
- ASSOCIATED ENTERPRISES – SECTION 92A (1)
- INTERNATIONAL TRANSACTION [SECTION 92B]
- ARMS’ LENGTH PRINCIPLE
- COMPUTATION OF ARM’S LENGTH PRICE [SECTION 92C]
- SELECTION OF TESTED PARTY
- SELECTION OF PROFIT LEVEL INDICATOR
- SELECTION OF MOST APPROPRIATE METHOD – RULE 10C
- DATA TO BE USED FOR ANALYZING COMPARABILITY OF AN UNCONTROLLED TRANSACTION WITH AN INTERNATIONAL TRANSACTION
- ARITHMETIC MEAN – WHEN MORE THAN ONE PRICE IS DETERMINED
- APPLICABILITY OF RANGE CONCEPT – WHEN MORE THAN ONE PRICE IS DETERMINED
- FUNCTIONS, ASSETS AND RISK (FAR) ANALYSIS
- DOCUMENTATIONS AND COMPLIANCES – DOCUMENTATION REQUIREMENT UNDER THE INCOME-TAX ACT, 1961
- FUNCTIONAL ANALYSIS
- ECONOMIC ANALYSIS
- PENALTY FOR UNDER-REPORTING OF INCOME – SECTION 270A
- PENALTY FOR MISREPORTING OF INCOME – SECTION 270A
- PENALTY FOR FAILURE TO KEEP AND MAINTAIN INFORMATION AND DOCUMENTATION – SECTION 271AA
- PENALTY FOR FAILURE TO FURNISH INFORMATION OR DOCUMENT U/S 92D – SECTION 271G
- COUNTRY BY COUNTRY REPORTING
- Domestic Transfer Pricing
- SAFE HARBOUR RULES FOR INTERNATIONAL TRANSACTION
- TRANSFER PRICING ASSESSMENT procedure in India
- APPEAL PROCEDURE
- POWER OF ASSESSING OFFICER TO DETERMINE THE ARM’S LENGTH PRICE
- REFERENCE TO TRANSFER PRICING OFFICER [SECTION 92CA]
- RECTIFICATION OF TPO ORDER
- POWERS OF TPO
- SECONDARY ADJUSTMENT – SECTION 92CE
- DISPUTE RESOLUTION MECHANISM UNDER TRANSFER PRICING
- ADVANCE PRICING AGREEMENT
- MUTUAL AGREEMENT PROCEDURE
- MISCELLANEOUS TRANSFER PRICING PROVISIONS
Section 2 - Non-Resident Taxation
- CHARGE OF INCOME TAX AND RESIDENTIAL STATUS
- RESIDENTIAL STATUS OF A COMPANY
- SCOPE OF TOTAL INCOME AND INCOME DEEMED TO BE RECEIVED IN INDIA AND ACCRUE OR ARISE IN INDIA
- TAXABILITY OF OFFSHORE FUNDS AND INCOME THROUGH OR FROM ANY PROPERTY, ASSET OR SOURCE OF INCOME IN INDIA
- SALARY PAYABLE BY GOVERNMENT FOR SERVICES RENDERED OVERSEAS AND DIVIDEND PAID BY AN INDIAN COMPANY OUTSIDE INDIA
- EXEMPT INCOME OF NON-RESIDENTS
- INTEREST AND ROYALTY AND FEES FOR TECHNICAL SERVICES
- PRESUMPTIVE TAXATION FOR NON-RESIDENTS – introduction
- Capital Gains tax provisions – CA Final Direct and International Tax Notes
- WITHHOLDING TAX FROM PAYMENTS TO NON – RESIDENTS
Section 4 - Double Taxation Relief
- CONCEPT OF DOUBLE TAXATION AND WHY IT ARISES AND TYPES OF DOUBLE TAXATION RELIEF
- COUNTRIES WITH WHICH NO AGREEMENT EXISTS UNILATERAL AGREEMENTS – SECTION 91
- TREATY PROVISION TO OVERRIDE INCOME TAX ACT AND MODE OF COMPUTATION OF INCOME OF NON-RESIDENTS
- Foreign Tax Credit in India – Rule 128 of the Income Tax Rules 1962 – CA Final International Tax Notes
Section 5 - Black Money
- KEY FEATURES OF THE BLACK MONEY ACT
- APPLICABILITY AND COVERAGE OF THE BLACK MONEY ACT – SECTION 1
- BASIS OF CHARGE – SECTION 3
- DEFINITION OF ASSESSEE – SECTION 2(2)
- APPLICABILITY OF BLACK MONEY ACT TO PERSONS RESIDENT IN INDIA
- DEFINITION OF UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 2(11)
- RELEVANT PREVIOUS YEAR FOR CHARGEABILITY TO TAX – UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3
- VALUATION OF AN UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3(2)
- TRANSFER OF ASSETS BEFORE VALUATION DATE
- VALUATION IN CASE OF ACQUISITION OF ASSET OUT OF CONSIDERATION OF OLD ASSET OR BANK ACCOUNT – RULE 3(3)
- MEANING OF ESTABLISHED SECURITIES MARKET – EXPLANATION 1 TO RULE 3
- MEANINGFUL ANNUAL VALUE OF SHARES TRADED ON THE EXCHANGE – EXPLANATION 1 TO RULE 3
- MEANING OF QUOTED SHARE OR SECURITY – EXPLANATION 1 TO RULE 3
- MEANING OF UNQUOTED SHARE AND SECURITY – EXPLANATION 1 TO RULE 3
- SCOPE OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 4(1)
- VARIATION MADE IN FOREIGN INCOME DURING ASSESSMENT OR REASSESSMENT- SECTION 4(2)
- NON-INCLUSION OF UNDISCLOSED FOREIGN INCOME AND ASSET IN INCOME COMPUTED UNDER INCOME-TAX ACT- SECTION 4(3)
- NO DISALLOWANCE AND SET-OFF FOR COMPUTATION OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 5
- DEDUCTION FROM VALUE OF UNDISCLOSED ASSET OUTSIDE INDIA
- DEDUCTION FROM VALUE OF IMMOVABLE PROPERTY OUTSIDE INDIA
- TAX AUTHORITIES UNDER THE BLACK MONEY ACT – SECTION 6
- CHANGE OF TAX AUTHORITY – SECTION 7
- POWERS OF TAX AUTHORITY
- PROCEEDINGS BEFORE TAX AUTHORITIES TO BE JUDICIAL PROCEEDINGS – SECTION 9(1)
- ASSESSMENT OF FOREIGN INCOME AND ASSETS – SECTION 10
- TIME LIMIT FOR COMPLETION OF ASSESSMENT AND REASSESSMENT – SECTION 11(1)/(2)
- NON-APPLICABILITY OF THE 2-YEAR TIME LIMIT FOR COMPLETION OF ASSESSMENT- SECTION 11(3)
- EXCLUSIONS IN COMPUTING LIMITATION PERIOD OF ASSESSMENT/REASSESSMENT – EXPLANATION 1 TO SECTION 11
- RECTIFICATION OF MISTAKE – SECTION 12
- NOTICE OF DEMAND – SECTION 13
- DIRECT ASSESSMENT OR RECOVERY NOT BARRED – [SECTION 14]
- APPEALS TO COMMISSIONER (APPEALS) – SECTION 15
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO HIGH COURT – SECTION 19
- APPEAL TO SUPREME COURT – SECTION 21
- REVISION OF ORDERS PREJUDICIAL TO REVENUE – SECTION 23
- REVISION OF OTHER ORDERS – SECTION 24
- PAYMENT OF TAX DURING PENDING APPEAL
- RECOVERY OF TAX DUES BY ASSESSING OFFICER -SECTION 30
- RECOVERY OF TAX DUES BY TAX RECOVERY OFFICER – SECTION 31
- MODES OF RECOVERY OF TAX DUES – SECTION 32
- TAX RECOVERY OFFICER BY WHOM RECOVERY OF TAX DUES IS TO BE EFFECTED – SECTION 33
- RECOVERY OF TAX DUES IN CASE OF A COMPANY IN LIQUIDATION – SECTION 34
- LIABILITY OF MANAGER OF A COMPANY – SECTION 35
- JOINT AND SEVERAL LIABILITY OF PARTICIPANTS -SECTION 36
- RECOVERY THROUGH STATE GOVERNMENT- SECTION 37
- RECOVERY OF TAX DUES IN PURSUANCE OF DTAA OR TAX INFORMATION EXCHANGE AGREEMENT- SECTION 38
- RECOVERY BY SUIT OR UNDER OTHER LAW NOT AFFECTED – SECTION 39
- INTEREST FOR DEFAULT IN FURNISHING RETURN AND PAYMENT OR DEFERMENT OF ADVANCE TAX – SECTION 40
- PENALTY IN RELATION TO UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 41
- PENALTY FOR FAILURE TO FURNISH RETURN FOR FOREIGN INCOME AND ASSET – SECTION 42
- PENALTY FOR FAILURE TO FURNISH INFORMATION OF FOREIGN ASSET OR FOREIGN INCOME IN RETURN OF INCOME – SECTION 43
- DETERMINATION OF VALUE OF FOREIGN BANK ACCOUNT IN INR – EXPLANATION TO SECTION 42
- PENALTY FOR DEFAULT IN PAYMENT OF TAX ARREAR -SECTIONS 44
- PENALTY FOR OTHER DEFAULTS – SECTION 45
- PROCEDURE FOR IMPOSING PENALTY – SECTION 46
- PRIOR APPROVAL OF JOINT COMMISSIONER FOR IMPOSING PENALTY – SECTION 46
- BAR OF LIMITATION FOR IMPOSING PENALTY – SECTION 47
- OFFENCES AND PROSECUTION – CHAPTER V
- AGREEMENT WITH FOREIGN COUNTRIES OR SPECIFIED TERRITORIES – SECTION 73
- MODES OF SERVING NOTICE – SECTION 74
- ADDRESS FOR COMMUNICATION OF NOTICE BY POST OR APPROVED COURIER SERVICE – SECTION 74 READ WITH RULE 14
- E-MAIL ADDRESS FOR COMMUNICATION OF NOTICE – SECTION 74 READ WITH RULE 14
- AUTHENTICATION OF NOTICES AND OTHER DOCUMENTS – SECTION 75
- NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES – SECTION 76
- APPEARANCE BY APPROVED VALUER IN CERTAIN MATTERS OR AUTHORIZED REPRESENTATIVE – SECTIONS 77 & 78
- MEANING OF AUTHORISED REPRESENTATIVE – SECTION 78
- ROUNDING OFF OF INCOME, VALUE OF ASSET AND TAX – SECTION 79
- CONGNIZANCE OF OFFENCE – SECTION 80
- ASSESSMENT NOT TO BE INVALID ON CERTAIN GROUNDS – SECTION 81
- BAR OF SUITS IN CIVIL COURTS – SECTION 82
- INCOME-TAX PAPERS TO BE AVAILABLE FOR THE PURPOSES OF THE BLACK MONEY ACT – SECTION 83
- APPLICATION OF PROVISIONS OF THE INCOME-TAX ACT – SECTION 84
- AMENDMENT OF PREVENTION OF MONEY-LAUNDERING ACT, 2002 – SECTION 88
Section 6 - Overview of Double Tax Convention
Section 7 - Application and interpretation of tax treaties
- ORIGINATION OF INTERNATIONAL TAX LAW AND DOUBLE TAXATION AND CONNECTING FACTORS
- DEFINITION OF TREATY , DOUBLE TAXATION AVOIDANCE AGREEMENT
- DIRECTIVE PRINCIPLES FOR INTERNATIONAL AGREEMENTS UNDER INDIAN CONSTITUTION AND ROLE OF VIENNA CONVENTION IN APPLICATION AND INTERPRETATION OF TAX TREATIES
- INDIAN JUDICIARY ON PRINCIPLES OF INTERPRETATION IN VIENNA CONVENTION AND ARTICLE 33: INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR MORE LANGUAGES INDIA AND TAX INFORMATION AND EXCHANGE AGREEMENT (TIEA)
- INTERPRETATION OF TREATIES – MONIST VIEW , DUALISTIC VIEW AND TREATY OVER DOMESTIC LAW
- INTERNATIONAL TAX CONFLICTS AND DOUBLE TAXATION INTRODUCTION AND BASIC PRINCIPLES OF INTREPRETATION OF A TREATY
- CUSTOMARY INTERNATIONAL LAW OF TREATY INTERPRETATION – OBJECTIVE INTERPRETATION , SUBJECTIVE INTERPRETATION AND PURPOSIVE INTERPRETATION
- CUSTOMARY LAW OF TREATY INTERPRETATION PRINCIPLE OF EFFECTIVENESS AND CONTEMPORANEA EXPOSITIO AND LIBERAL CONSTRUCTION
- EXTRINSIC AIDS TO INTERPRETATION OF A TAX TREATY
- OBJECTIVES OF TAX TREATIES ,OBJECTIVE OF DTAAs AND PURPOSE OF ENTERING INTO A DTAA INTO INDIAN CONTEXT – SECTION – 90(1) ?
Section 8A - Anti-Avoidance Measures
Section 8B - BEPS
Section 9 - E-Commerce
- HOW BUSINESS IS TRANSACTED THROUGH E-COMMERCE AND PREVALENT BUSINESS FORMS IN VARIOUS SEGMENTS OF DIGITAL ECONOMY?
- GROWTH OF E-COMMERCE AND TAXATION ISSUES ON E-COMMERCE ?
- PERMANENT ESTABLISHMENT IN E-COMMERCE AND DETERMINATION OF NATURE OF INCOME IN E-COMMERCE TRANSACTIONS?
- OECD RECOMMENDATIONS UNDER ACTION PLAN 1 OF BEPS TO TACKLE TAXATION ISSUES OF E-COMMERCE AND INTRODUCTION OF NEW CHAPTER OF EQUALIZATION LEVY ?
- WHO IS LIABLE TO DEDUCT EQUALISATION LEVY AND WHOSE INCOME IS LIABLE FOR DEDUCTION OF EQUALISATION LEVY ?
Article on CA Students
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CHARGE OF INCOME TAX AND RESIDENTIAL STATUS
CHARGE OF INCOME TAX – SECTION 4
- CHARGE OF INCOME-TAX FOR INCOME PERTAINING TO THE PREVIOUS YEAR – SECTION 4(1)
- Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of this Act in respect of the total income of the previous year of every person [Section 4(1)].
- CHARGE OF INCOME-TAX FOR INCOME PERTAINING TO OTHER THAN THE PREVIOUS YEAR – PROVISO TO SECTION 4(1)
- Where by virtue of any provision of the Act income-tax is to be charged for other than the previous year, income-tax shall be charged accordingly (i.e., as per provisions of Sections 172, 174, 174A, 175 and 176).
- DEDUCTION OF TAX OR PAYMENT OF ADVANCE TAX – SECTION 4(2)
- In respect of income chargeable under section 4(1), income-tax shall be deducted at source (i.e., TDS) or paid in advance (i.e., advance tax), where it is so deductible or payable under any provision of this Act.
RATES OF TAX, SURCHARGE AND CESS FOR FOREIGN COMPANIES AS PER INCOME TAX ACT, 1961
Foreign Companies are taxable at the rate of 40%. This rate would be further increased by : –
- Surcharge @ 2% of such income-tax, where the total income exceeds Rs. 1 crore but does not exceed Rs. 10 crores.
- 5% of such income tax where total income exceeds Rs. 10 crores.
- Education Cess and Secondary and Higher Education Cess (SHEC) of 2% and 1%, respectively
- (ON INCOME TAX + SURCHARGE)
Non-corporate Non-residents – TAX rates applicable to residents.
- However, the higher basic exemption limit for resident senior citizens and super senior citizens
- would not be available for non-resident individuals.
RESIDENTIAL STATUS – SECTION 6
- The tax incidence on a Person, depends upon the Residential Status of such person.
- Resident taxpayers are liable to pay tax on their global income (i.e., Indian income and foreign income).
- However, the non-resident taxpayers are taxable only for their India sourced income.
RESIDENTIAL STATUS – THREE CATEGORIES – SECTION 6
TAXPAYERS ARE CLASSIFIED INTO THREE BROAD CATEGORIES ON THE BASIS OF THEIR RESIDENTIAL STATUS : –
RESIDENTIAL STATUS – ROR VS RNOR
RESIDENTIAL STATUS OF AN INDIVIDUAL
- He has been in India during the previous year for a total period of 182 days or more; or
- He has been in India during the 4 years immediately preceding the previous year As per Section 6(1), an individual is said to be resident in India in any previous year, if he satisfies any one of the following basic conditions for total period of 365 days or more and has been in India for at least 60 days in the previous year .
IF THE INDIVIDUAL DOES NOT SATISFY ANY OF THE BASIC CONDITIONS, HE IS SAID TO BE NON – RESIDENT.
EXCEPTIONS : – Basic condition b) is not taken into consideration in two special cases : –
CASE I : –
- Indian citizen, who leaves India in any previous year for the purpose of employment outside India or
- An Indian citizen, who leaves India in any previous year as a member of the crew of an Indian ship for the purposes of employment outside India.
CASE II : –
- Indian citizen or a person of Indian origin, who, being outside India and comes on a visit to India in any previous year.
- A PERSON IS SAID TO BE OF INDIAN ORIGIN if he or either of his parents or either of his grandparents were born in undivided India.
- In these two cases, an individuals will be considered as a resident, only if the period of their stay during the relevant previous year in India is 182 days or more.
- The individual shall not be treated as resident even if he was in India for 365 days during the 4 preceding years and 60 days in the relevant previous year.
RESIDENT AND ORDINARILY RESIDENT
- A person is said to be RESIDENT AND ORDINARILY RESIDENT if he satisfies both the additional conditions specified under section 6(6).
ADDITIONAL CONDITIONS : –
CONDITION I : –
- Individual has been resident in India in 2 out of 10 previous years immediately preceding the relevant previous year.
CONDITION II : –
- Individual has during the 7 previous years preceding the relevant previous year been in India for a period of 730 days or more.
RESIDENT BUT NOT ORDINARILY RESIDENT
- An individual is said to be a resident but not ordinarily resident (RNOR) if he fails to satisfy any of the additional conditions.
- Only Individuals and HUFs can be RNOR/ROR. All other classes of Assessee can be either
- Resident or
- Non-resident .
POINTS TO CONSIDER · Residential status is to be determined on year to year basis
· The term “stay in India” includes stay in the territorial waters of India (i.e. 12 nautical miles into the sea from the Indian coastline). Even the stay in a ship or boat moored in the territorial waters of India would be sufficient to make the individual resident in India.
· The residence of an individual for income-tax purpose has nothing to do with citizenship, place of birth or domicile. An individual can, therefore, be resident in more countries than one even though he can have only one domicile.
· For the purpose of counting the number of days stayed in India, both the date of departure as well as the date of arrival are considered to be in India.
· It is not necessary that the period of stay must be continuous or active nor is it essential that the stay should be at the usual place of residence, business or employment of the individual.
- EXAMPLE 1 : – Rahul is a Indian citizen working at a MNC in Mumbai. He was given an opportunity to work on an assignment in UK for such MNC. He had never visited any foreign country earlier and left India on June 30, 2016. Determine his residential Status ?SOLUTION : –
Individual is said to be resident in India, if he stays in India for 60 days or more during the previous year and for 365 days or more during 4 preceding years. However, when Individual is leaving India for the purpose of employment outside India then said period of 60 days is extended to 182 days.
In this case Rahul stayed in India for 91 days
[30 days (April) + 31 days (May) +30 days (June)] during PY 2016-17.
Thus, he is NR for PY , 2016-17 as he does not satisfy any of the basic conditions.
EXAMPLE 2 : –
Jerry is a foreign citizen outside India, who is a person of Indian origin. He comes on visit to India on January 1, 2017. He left India on April 1, 2017. Determine his residential Status for PY 2016-17 ?
SOLUTION : –
As a general rule, a person is said to be resident in India if he is in India for 60 days or more during the previous year and 365 days or more during 4 preceding years. However, when a person of Indian origin comes on visit to India, then said period of 60 days is extended to 182 days. Since Jerry was in India for Less than 182 days, he is a NR for previous year 2016-17.
EXAMPLE 3 : –
Ramesh is working in MNC located at Gurgaon. He had taken foreign visit on various occasion due to company’s work. However, he had not taken any foreign visit during he previous year 2017-18. His stay in India during the last 7 years is given as under :-
PY 2016-17 PY 2015-16 PY 2014-15 PY 2013-14 PY 2012-13 PY 2011-10 PY 2009-10 PY 2008-09 2007-08 PY 2006-07 183 days 190 days 185 days 150 days 250 days 300 days 250 days 190 days 40 days 50 days
Determine his residential status ?
SOLUTION : –
Residential Status – Section 6
Ramesh is present in India during the whole of PY 2017-18. Thus, he is a resident in India as he satisfies one of the basic conditions under Section 6. However, in order to be considered as resident and ordinarily resident he has to satisfy two additional conditions, i.e : –
- Ramesh should be resident in India in 2 out of 10 previous years immediately preceding the relevant previous year.
- During the 7 preceding years Ramesh should be in India
for a period of 730 days or more.
Residential Status Of Ramesh During The Last 10 Years Is Given Here Under : –
|Year||Presence in India||Status||Basic condition|
|2015-16||183||Resident||First basic condition satisfied|
|2014-15||190||Resident||First basic condition satisfied|
|2013-14||185||Resident||First basic condition satisfied|
|2012-13||150||Resident||Second basic condition satisfied|
|2011-12||250||Resident||First basic condition satisfied|
|2010-11||300||Resident||First basic condition satisfied|
|2009-10||250||Resident||First basic condition satisfied|
|2008-09||190||Resident||First basic condition satisfied|
|2007-08||40||Non-resident||None of the basic condition satisfied|
|2006-07||50||Non-resident||None of the basic condition satisfied|
In this case, Ramesh satisfies both the additional conditions as he has been in India for more than 730 days during the last 7 years (1508 days) and he has been resident in India in last 8 years out of 10 years. Thus, Ramesh is Resident and Ordinarily resident in India.
HOW TO DETERMINE PERIOD OF STAY IN INDIA FOR AN INDIAN CITIZEN, BEING A CREW MEMBER ? – RULE 126
- In case of foreign bound ships where the destination of the voyage is outside India, there was uncertainty regarding the manner and the basis of determining the period of stay in India for an Indian citizen, being a crew member.
- CBDT has vide, Notification No. 70/2015 dated 17.8.2015, inserted Rule 126 in the Income-tax Rules, 1962 to compute the period of stay in such cases.
According to Rule 126, in case of an individual, being a citizen of India and a member of the crew of a ship, the period or periods of stay in India shall, in respect of an eligible voyage, not include the following period:
|Period to be excluded Period commencing from||Period ending on|
|Date entered into Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage||and||Date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.|
MEANING OF CERTAIN TERMS : –
|(a)||Continuous Discharge Certificate||This term has the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum Seafarer’s Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958.|
|(b)||Eligible voyage||A voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where – for the voyage having originated from any port in India, has as its destination any port outside India; and
a) for the voyage having originated from any port outside India, has destination of any port in India.’.
RESIDENTIAL STATUS OF A HUF, FIRM, AOP/BOI, LOCAL AUTHORITIES AND ARTIFICIAL JURIDICAL PERSONS
RESIDENT : –
- Such persons would be resident in India if the control and management of their affairs is situated wholly or partly in India.
|POINTS TO CONSIDER|
|· If the control and management of the affairs is situated wholly outside India it would become a non-resident.
· Control and Management of HUF is with its Karta or its Manager.
· Control and Management of Firm/AOP is with its Partners/Members.
RESIDENTIAL STATUS OF A HUF – ROR OR RNOR
ROR/RNOR : –
- An HUF, which is resident in India, can be a ROR or RNOR, depending on whether the Karta of Resident HUF satisfies the additional conditions applicable to Individuals : –
ADDITIONAL CONDITIONS : – BOTH CONDITIONS SATISFIED, HUF IS A ROR
- Karta of Resident HUF should be resident in at least 2 previous years out of 10 previous years immediately preceding relevant previous year.
- Stay of Karta during 7 previous year immediately preceding relevant previous year should be 730 days or more.
NOTE : –
- HUF which fails to satisfies any of the additional condition would be Resident but not ordinarily resident in India.
- Firms, Association of persons, Local Authorities and other artificial juridical persons can be either resident or non-resident.
EXAMPLE 1 : –
- The head office of XYZ, HUF was situated in UK. What would be the residential status of HUF for PY 2017-18 when affairs of HUF are managed from –
- Partly from India
SOLUTION : –
- The residential status of HUF would be non-resident as it is wholly managed from outside India
- The residential status of HUF would be resident as it is partly managed from India.
EXAMPLE 2 : –
- Determine the residential Status in clause (b) in the above example if the Karta of HUF is present in India for more than 730 days during the preceding 7 years. He is also resident in India in 8 years out of preceding 10 years..
SOLUTION : –
- HUF would be resident and ordinarily resident in India as its Karta satisfies both the additional conditions.
RESIDENTIAL STATUS – SECTION 6
IMPORTANCE OF RESIDENTIAL STATUS OF A COMPANY
Provisions – Old And Amended