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Section 6 of the Income Tax Act

Section 6 of Income Tax Act, 1961

Vikram Singh Rawat | Updated: 5 May, 2022

Section 6 of Income Tax Act, 1961 contains provision relating to Residence in India. The taxability of an assessee is dependent on the Residential status during any Previous Year.
Resident of India
Individual
HUF
Company
1. Stays in India for 180 days or more in the previous year

2. 60 days or more in that Previous Year AND 365 days or more in Preceding 4 years provided :

2.1. Indian citizen leaves India in the previous year for the purpose of employment or as a member of a crew of an Indian Ship and stayed for more than 180 days ( substitute 60 days)

2.2. Indian Citizen and Person of Indian origin person, being outside India, having total income in India more than 15 lakh , 180 days would be consider.

2.3. In ”2.2”, person income more than 15 lakh in India which is not taxable in any other country due to domicile, deemed to be a resident of India.
 HUF would be considered as a resident of India except if control of management of its affair is situated outside of India. Company would be resident if incorporated in India or place of effective management in that year is in India.
Not Ordinarily Resident of India
Individual
HUF
Company
1. Individual who has been Non-Resident in India for 9 out of 10 preceding years

2. Individual has been in India for 729 days or less in preceding 7 years.

3. Citizen of India or Person of Indian Origin, having total income exceeding 15 lakhs (other than foreign source) and stays in India for 120 days or more but less than 182 days.

4. Deemed Resident of India		 An HUF is said to be Not Ordinarily Resident if:

1. Manager of HUF, has been Non-Resident in India for 9 out of 10 preceding years, OR

2. Manager of HUF, has been in India for 729 days or less in preceding 7 years		  

Explanations :

Income From Foreign Sources Income which accrues or arises outside India except income derived from a business controlled in or a profession set up in India and which is not deemed to accrue or arise in India.  
Non – Resident Indian (NRI) individual, being a citizen of India or a person of Indian origin who is not a “Resident”.  
Person Of Indian Origin A person shall be deemed to be of Indian origin if
  • he, or
  • either of his parents or
  • any of his grand-parents, was born in undivided India;
Place of Effective Management a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are taken