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What is Residence in India? What is Income deemed to be received? Section 6 and 7 of Income Tax Act 1961

Residence in India and Income deemed to be received are defined under section 6 and 7 of Income Tax Act 1961. Provisions under these sections are:

Section 6 of Income Tax Act "Residence in India"

6. For the purposes of this Act,-
(1) An individual is said to be resident in India in any previous year, if he-
(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or
(b) [* * *]
(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.
[Explanation 1].-In the case of an individual,-
(a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ;

 

(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted.
[Explanation 2.-For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.]
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

(3) A company is said to be resident in India in any previous year, if-
(i) it is an Indian company ; or
(ii) during that year, the control and management of its affairs is situated wholly in India.
Following clause (3) shall be substituted for the existing clause (3) of section 6 by the Finance Act, 2015, w.e.f. 1-4-2016 :
(3) A company is said to be resident in India in any previous year, if-
(i) it is an Indian company; or
(ii) its place of effective management, in that year, is in India.
Explanation.-For the purposes of this clause "place of effective management" means a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole, are in substance made.
(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.
(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.
(6) A person is said to be "not ordinarily resident" in India in any previous year if such person is-
(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.

Section 7 of Income Tax Act "Income deemed to be received"

7. The following incomes shall be deemed to be received in the previous year :-
(i) the annual accretion in the previous year to the balance at the credit of an employee participating in a recognised provident fund, to the extent provided in rule 6 of Part A of the Fourth Schedule ;

(ii) the transferred balance in a recognised provident fund, to the extent provided in sub-rule (4) of rule 11 of Part A of the Fourth Schedule ;

(iii) the contribution made, by the Central Government or any other employer in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD.

   
 

Income Tax Act 1961

What are the Definitions under Income Tax 1961? Section 2 of Income Tax Act 1961

What is Previous Year? What is Charge of Income tax? Section 3 and 4 of Income Tax Act 1961

What is Scope of total income? What is Apportionment of income between spouses governed by Portuguese Civil Code? Section 5 and 5A of Income Tax Act 1961

What is Residence in India? What is Income deemed to be received? Section 6 and 7 of Income Tax Act 1961

What is Dividend income? Section 8 of Income Tax Act 1961

What is Income deemed to accrue or arise in India? Section 9 of Income Tax Act 1961

What is the meaning of Certain activities not to constitute business connection in India? Section 9A of Income Tax Act 1961

What are the Incomes not included in total income? Section 10 of Income Tax Act 1961

What is the Special provision in respect of newly established undertakings in free trade zone, etc? Section 10A of Income Tax Act 1961

What is the Special provisions in respect of newly established Units in Special Economic Zones? Section 10AA of Income Tax Act 1961

What is the Special provisions in respect of newly established hundred per cent export-oriented undertakings? Section 10B of Income Tax Act 1961

What is Special provisions in respect of export of certain articles or things? Section 10BA of Income Tax Act 1961

What is Meaning of computer programmes in certain cases? Section 10BB of Income Tax Act 1961

What is Special provision in respect of certain industrial undertakings in North- Eastern Region? Section 10C of Income Tax Act 1961

 

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