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Residential Status of HUF - Companies - LLP - Firms - APO / BOI Under Income Tax Act


Residential Status of HUF


HUF will be Resident if its control and management of affairs of the business of HUF are located in India wholly or partly.


Further, HUF will be considered Ordinary Resident if Karta of HUF is Ordinary Resident in India, elese HUF will be considered Resident but Not Ordinary Resident in India.


HUF will be Non-Resident if, the control and affairs of the business of HUF are located wholly outside India.


Residential Status of Firms / AOP / BOI


Similar to HUF, Firms / AOP / BOI will be considered as Indian Residents if control and affairs of the business is situated wholly or partially within India.


Firms / AOI / BOI whose control and management of affairs of business is situated wholly outside India then they will be considered as Non-Resident.


Key Notes on Control and Management of Affairs of Business:


  • Control and Management does not mean carrying day to day business by employees.

  • Control and Management means person actually responsible for handling business is located whether in India or Not . Business can be operated outside India but can be controlled from India.

  • Place of Control and Managmenet can be different from place of registered office address

Residential Status of Companies


Company is an Indian Resident if either of one condition is met :


  • It is an Indian company (means company incorporate in India under current or erswhile companies acts) or

  • Its place of effective management (POEM) is in India in the year under consideration

Place of Effective Management (POEM) - mean a place where Key management and commercial decisions are taken to conduct the business.


To Read About Residential Status of Individual Please Read Here


To Read About Place of Effective Management Please Read Here


 

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