1)Under the Code, the residential status of an individual in a financial year will
continue to be determined on the basis of his stay in India during the financial year and the
earlier years. He would be a resident in India if,-
(a) he is in India for 182 days or more during the financial year; or
(b) he is in India for 365 days or more during the four years immediately preceding
the financial year and for 60 days or more in the financial year.
2) The residency of an individual will be determined only on the basis of the test
specified in sub para (a) of para 4.9 in the case of,-
(a) an Indian citizen who leaves India during the financial year for the purpose of
employment outside India with an employer;
(b) an Indian citizen who leaves India as a member of a crew of an Indian ship; and
(c) an Indian citizen or a person of Indian origin, who comes to India on a visit
during the financial year.
3) An individual will be treated as a person of Indian origin if either he or either of his
parents or any of his grand-parents was born in undivided India.
4) An Indian company will always be treated as resident in India. However, a foreign
company can either be resident or non-resident in India. It will be treated as resident in
India if, at any time in the financial year, the control and management of its affairs is situated
wholly or partly in India (it need not be wholly situated in India, as at present).
5) A Hindu Undivided Family (HUF), partnership firm, an association of persons or
any other person will be resident in India if the control and management of their affairs are
wholly or partly situated within India at any time in the relevant financial year.
6) A person will be a non-resident in India if he is not a resident in India.
7) Under the Code, the concept of "resident but not ordinarily resident" for an
individual and a Hindu undivided family will be replaced by providing exemption to the
income of an individual sourced outside India and not derived from a business controlled or
a profession set up in India. This exemption will be available to the individual in the
financial year in which such individual becomes a resident and in the immediately succeeding
financial year, if such individual was a non-resident for nine years immediately preceeding
the financial year in which he becomes a resident.
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