The following norms one has to keep in mind while deciding the residential status
of an assessee:
1. Different taxable entities - All taxable entities are divided in the following
categories for the purpose of determining residential status:
a. An individual;
b. A Hindu undivided family;
c. A firm or an association of persons;
d. A joint stock company; and
e. Every other person.
2. Different residential status - An assessee is either: (a) resident in India, or (b)
non-resident in India.
However, a resident individual or a Hindu undivided family has to be (a) resident
and ordinarily resident, or (b) resident but not ordinarily resident. Therefore, an
individual and a Hindu undivided family can either be:
a. resident and ordinarily resident in India; or
b. resident but not ordinarily resident in India; or
c. non-resident in India
All other assessees (viz., a firm, an association of persons, a joint stock company
and every other person) can either be:
a. resident in India; or
b. non-resident in India
3. Residential status for each previous year - Residential status of an assessee is
to be determined in respect of each previous year as it may vary from previous
year to previous year.
4. Different residential status for different assessment years - An assessee may
enjoy different residential status for different assessment years. For instance, an
individual who has been regularly assessed as resident and ordinarily resident has
to be treated as non-resident in a particular assessment year if he satisfies none of
the conditions of section 6(1).
5. Resident in India and abroad - It is not necessary that a person, who is
“resident” in India, cannot become “resident” in any other country for the same
assessment year. A person may be resident in two (or more) countries at the same
time. It is, therefore, not necessary that a person who is resident in India will be
non-resident in all other countries for the same assessment year.
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