Rules of determining Residential Status of an Assessee
The total income of an assessee varies according to his residential status in india. So the incidence of tax also varies according to residential status inorder to calculate his tax liability.
i.Residential status is determined for each category of persons separately. That means we have 3 categories of persons like Individual, Hindu undivided family and companies.There are separate sets of rules to determine the residential status of the above category of persons.
ii.Residential status of a person will be determined for every previous year because it may change from year to for example- “x” may be resident in india in the previous year 2005-06 but he may be non-resident in the previous year 2006-07.
iii.A person may be resident of more than one country for any previous year.
For Example:
In the previous year 2006-07 “x” may be resident in India and also resident of the US.
iv.Citigency of a country and residential starts of that country are separate.
For Example:
A person may be a citizen of India but may not be a resident of india. Similarly a foreigner may be a resident of India but a citizen of foreign country.
v.If a person is resident in India in the previous year with respect to also be resident in India for each of his other sources of income.
vi.It is the duty of the assessee to supply all material facts to the assessing officer inorder to enable him to determine his residential status correctly.