Income Tax Residency in India
40 Questions
1 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the minimum number of days an individual must stay in India during the previous year to be considered a resident?

  • 120 days
  • 60 days
  • 182 days (correct)
  • 300 days

Which of the following is NOT a condition for determining ordinary residency?

  • Staying for 60 days or more in the previous year
  • Staying for 60 days or more in the previous year and 365 days over four years
  • Staying for 182 days or more in the previous year
  • Staying for 90 days or more in the previous year (correct)

What does being 'ordinarily resident' mean in the context of income tax?

  • An individual who has never stayed in India
  • An individual who only lives in India for tax purposes
  • An individual who meets certain residency conditions under income tax laws (correct)
  • An individual who stays outside India for more than five years

Which test requires an individual to stay in India for a total of 365 days in the four years preceding the relevant year?

<p>Test 2 (A)</p> Signup and view all the answers

What law defines residential status for tax purposes in India?

<p>Income Tax Act of 1961 (C)</p> Signup and view all the answers

What is considered as deemed income under the Income Tax Act for the financial year 68?

<p>Cash credit (D)</p> Signup and view all the answers

Which financial year corresponds to the deemed income 'No explain bullion cash, Jewellery'?

<p>69A (C)</p> Signup and view all the answers

What is the term for the year in which income is actually earned or expenditure is incurred?

<p>Financial Year (D)</p> Signup and view all the answers

Can a non-citizen be considered a resident in India for income tax purposes?

<p>Yes, residency is independent of citizenship. (D)</p> Signup and view all the answers

What does the term 'Previous Year' refer to in the context of income tax?

<p>The financial year preceding the assessment year. (C)</p> Signup and view all the answers

What happens if a non-resident ship owner has no representative in India and the ship leaves Indian ports with unpaid income from loaded goods?

<p>The ship will not be allowed to leave until the tax is paid. (A)</p> Signup and view all the answers

In exceptional cases, how does the income from the previous year relate to the tax assessment in the current year?

<p>It functions as the assessment year. (B)</p> Signup and view all the answers

What does the assessing officer determine regarding a non-resident ship owner leaving India?

<p>Whether the individual is leaving temporarily or permanently. (D)</p> Signup and view all the answers

When will income earned by a non-resident ship owner be taxed if they are leaving India for good?

<p>In the previous year. (A)</p> Signup and view all the answers

What do references like 'see-172' in income tax regulations indicate?

<p>They indicate further details in broader tax regulations. (C)</p> Signup and view all the answers

What is the duration of the previous year in the context of income tax assessment?

<p>From April to March (D)</p> Signup and view all the answers

For a newly set-up business, how is the previous year determined?

<p>From the date of commencement to 31st March of the following year (D)</p> Signup and view all the answers

What does the previous year encompass for a continuing business?

<p>The financial year preceding the assessment year (A)</p> Signup and view all the answers

If a new source of income is created, how is the previous year defined?

<p>The period between the source's inception and 31st March of the next year (B)</p> Signup and view all the answers

Which of the following is a requirement for all assesses regarding the previous year?

<p>To adhere to the financial year as the previous year for income tax purposes (A)</p> Signup and view all the answers

What happens if an AOP, BOP, or ATP is formed for a limited period?

<p>The assessment will be done in the same year. (C)</p> Signup and view all the answers

How is a person's income assessed if they are likely to sell their assets?

<p>Based on the income of the previous year. (B)</p> Signup and view all the answers

What should be anticipated when an individual transfers assets to avoid tax?

<p>Assessment will be based on the income of the previous year. (D)</p> Signup and view all the answers

If a business is discontinued during the assessment year, when will the assessment occur?

<p>In the same year including past income. (D)</p> Signup and view all the answers

In the context of avoiding tax, what might lead to an assessment if a person intends to sell assets?

<p>Suspicions about their intention to avoid tax. (C)</p> Signup and view all the answers

Which condition must be fulfilled to consider an individual as a Non-Resident according to the Income Tax Act?

<p>The individual must fulfill any one of the listed conditions. (B)</p> Signup and view all the answers

What does Sec-2(30) of the Income Tax Act 1961 pertain to?

<p>The determination of non-resident status. (C)</p> Signup and view all the answers

What needs to be considered for determining non-resident status?

<p>The relevant previous year's income and details. (C)</p> Signup and view all the answers

Which of the following is NOT a criterion for determining Non-Resident status?

<p>Staying in India for more than 182 days. (A)</p> Signup and view all the answers

What is implied if an individual does NOT fulfill any conditions under Sec-6(2) of the Income Tax Act?

<p>The individual is classified as a Non-Resident. (D)</p> Signup and view all the answers

Which of the following criteria qualifies an individual as a deemed resident in India?

<p>Their total income must exceed ₹15,00,000 excluding foreign income. (D)</p> Signup and view all the answers

Which situation allows a crew member on an Indian ship to be considered a resident using a shorter stay period?

<p>If they are an Indian citizen for 60 days during the year. (A)</p> Signup and view all the answers

What is one requirement for an individual to be classified as an ordinary resident in India?

<p>They must fulfill all conditions outlined in Sec 6(1). (B)</p> Signup and view all the answers

What is the duration needed for an Indian citizen visiting India to establish residency?

<p>They can establish residency in as little as 60 days. (B)</p> Signup and view all the answers

Which of the following statements about deemed residents is correct?

<p>Deemed residents are only those who exceed ₹15,00,000 in income from Indian sources. (C)</p> Signup and view all the answers

Under which circumstances can a person be considered a resident but not ordinarily resident in India?

<p>The person was a non-resident in India for 9 preceding years. (C)</p> Signup and view all the answers

What is the minimum duration one must reside in India to meet Test 2 for residency?

<p>730 days during the 7 preceding years. (D)</p> Signup and view all the answers

Which of the following is NOT a requirement for Test 3 in determining residency?

<p>The person has resided in India for at least 182 days. (D)</p> Signup and view all the answers

Which situation does NOT qualify as a person being resident but not ordinarily resident?

<p>Non-resident in India for 8 preceding years. (D)</p> Signup and view all the answers

Which of the following is a requirement for being deemed a resident under Test 1?

<p>Was resident in India for less than 2 preceding years. (D)</p> Signup and view all the answers

Flashcards

Resident Status

An individual's classification as either resident or ordinarily resident in India for tax purposes.

182 days test

Staying in India for 182 days or more in a year makes someone a resident for tax.

60 Days + 365 days

Staying in India for at least 60 days during the current year and 365 days or more within the four preceding years makes a person ordinarily resident.

Ordinary Residency

A type of residential status in India for tax, meaning the person isn't automatically a resident, but meets criteria.

Signup and view all the flashcards

Previous Year

The year used to determine a person's residential status in India.

Signup and view all the flashcards

Financial Year

The year income was earned or expense occurred.

Signup and view all the flashcards

Deemed Income

Income potentially considered for taxation, even if not directly earned.

Signup and view all the flashcards

Non-resident (for tax)

An Indian citizen who is not considered a resident for income tax purposes.

Signup and view all the flashcards

Non-Resident Ship Owner Tax

Rules for non-resident ship owners who operate ships in India and generate income there.

Signup and view all the flashcards

No Representative in India

If a non-resident ship owner has no representative in India, their ship may be prevented from leaving Indian ports until taxes on goods loaded on the ship are paid.

Signup and view all the flashcards

Income Paid Before Departure?

Tax rules apply based on whether the income from goods loaded on the ship is paid before the ship departs India.

Signup and view all the flashcards

Previous Year Income Tax

If the income is earned in the previous year but tax assessment happens in the same year, the previous year's income is used for assessment.

Signup and view all the flashcards

Leaving India Permanently

If a non-resident ship owner is leaving India permanently, income earned between the ship's departure and their departure is taxed in the previous year.

Signup and view all the flashcards

Assessment Year

The year for which income tax is calculated and paid. It starts on April 1st and ends on March 31st of the following year.

Signup and view all the flashcards

Continuing Business

A business that has been operating for more than one financial year. The previous year for such a business is the full financial year preceding the assessment year.

Signup and view all the flashcards

Newly Set-Up Business

A business that has been started recently. The previous year is the period from the date of its commencement to March 31st of the next year, which can be less than 12 months.

Signup and view all the flashcards

New Income Source

A new source of income that starts during the year. The previous year for this income is the period from the date of its creation to March 31st of the next year, which can be less than 12 months.

Signup and view all the flashcards

Limited Period Assessment

When an AOP, BOP, or ATP is formed for a specific duration, the assessment of their income is completed in the same year the entity is established.

Signup and view all the flashcards

Tax Avoidance: Previous Year Assessment

If someone is likely to transfer assets to avoid taxes, the assessment of their income is done in the previous year to catch any potential evasion.

Signup and view all the flashcards

Selling Assets: Previous Year Assessment

If someone is likely to sell assets, the tax authorities might assess their income based on the previous year to prevent tax evasion.

Signup and view all the flashcards

Discontinued Business: Assessment Year

When a business ends during the assessment year but its income was generated in the previous year, the income is assessed based on the previous year.

Signup and view all the flashcards

Loss or Gain from Discontinued Business

If a business is discontinued, any losses or gains from the previous year are assessed during the current assessment year.

Signup and view all the flashcards

Deemed Resident

An individual who meets specific criteria to be considered a resident in India for tax purposes, even if they don't meet the standard 182-day requirement.

Signup and view all the flashcards

High Income Deemed Resident

An individual is considered a deemed resident if their total income (excluding income from foreign sources) exceeds ₹15,00,000 in the previous year and they are not liable for taxes in any other country.

Signup and view all the flashcards

Ship Crew Resident Status

Indian citizens who are crew members on Indian ships for at least 60 days are considered residents.

Signup and view all the flashcards

Visitor Resident Status

An Indian citizen visiting India for at least 60 days is considered a resident, regardless of other factors.

Signup and view all the flashcards

Non-Resident Status

An individual is considered a Non-Resident in India for tax purposes if they meet certain criteria, primarily based on their residency history and days spent in India.

Signup and view all the flashcards

Sec-2(30) of Income Tax Act 1961

This section defines a Non-Resident as someone who does not meet the conditions outlined in Sec-6(2) of the Income Tax Act 1961, indicating they are not a resident.

Signup and view all the flashcards

Relevant Previous Year Income

The income from the previous year is used to determine the Non-Resident status of an individual for tax purposes.

Signup and view all the flashcards

Non-Resident: What if I left India Permanently?

If a Non-Resident ship owner leaves India permanently, any income earned from the ship between its departure and their departure will be taxed in the previous year.

Signup and view all the flashcards

Resident but Not Ordinarily Resident

A person can be considered a resident in India for tax purposes, but not ordinarily resident if they were resident in the previous year.

Signup and view all the flashcards

Test 1: 10+ Years Out of India

A person is considered not ordinarily resident if they were a non-resident for the 9 preceding years OR were resident in India for less than 2 preceding years.

Signup and view all the flashcards

Test 2: 730 Days in 7 Years

A person is considered ordinarily resident if they lived in India for 730 days or more during the 7 preceding years.

Signup and view all the flashcards

Test 3: Foreign Income & 120 Day Stay

An Indian citizen or person of Indian origin with total income from foreign sources exceeding ₹2,15,00,000 during the preceding year who stays in India for at least 120 days, but less than 182 days, is considered ordinarily resident.

Signup and view all the flashcards

Indian Residency

Indian residency rules determine an individual's tax status based on their time spent in India and income earned.

Signup and view all the flashcards

Study Notes

Residential Status of an Individual

  • Residential status is determined under the Income-tax Act 1961.
  • It can be divided into two categories: resident and ordinarily resident.
  • To determine the status, two tests are used.

Test 1

  • An individual who stayed in India for 182 days or more during the previous year, is treated as a resident.

Test 2

  • An individual who stayed in India for a period of 60 days or more during the four years preceding the relevant assessment year, is treated as an ordinary resident.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Description

Test your knowledge on the residency status and definitions related to income tax in India. This quiz covers key concepts like ordinary residency, deemed income, and the previous year as it pertains to tax laws. Perfect for students studying Indian taxation laws or professionals brushing up on their knowledge.

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser