RESIDENTIAL STATUS - Introduction - Income Tax - Ready Reckoner - Income Tax

RESIDENTIAL STATUS INTRODUCTION Tax is levied on total income of assessee. Under the provisions of Income Tax Act, 1961 the total income on each person is based upon his Residential Status. Section 6 of the Act divides the assessable persons into three categories: Resident ; Resident but Not ordinarily Resident and Non Resident The concept of Residential Status of a person has nothing to do with citzenship of a country. An Indian, who is a citizen of India can be non-resident for Income Tax purposes, whereas a person who is foreign national/citizen can be Resident of India for Income Tax purposes. Residential Status of a person depends upon the territorial connections of the person with this country, i.e. for how many days he has physically stayed in India. The Residential Status of the Assessee may change from Year to Year. What is essential is the status during the previous year and not in the assessment year. It is the duty of the assessee to place all material facts before A.O to enable him to determine his correct residential status.