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​How to determine the residential status of a HUF for the purpose of the Income-tax Law?​​

Open uri20170510 32134 59004f?1494421790 Anshul Dhawan asked over 2 years ago

​How to determine the residential status of a HUF for the purpose of the Income-tax Law?​​

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9 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

Control and management of business is said to be situated at a place where the head and brain of the organisation is situated. If HUF is resident, then the status of the karta determines whether it is resident and ordinary resident or resident but not ordinary resident . If the karta is resident and ordinary resident then the HUF is resident and ordinary resident and if karta is resident but not ordinary resident , then HUf resident but not ordinary resident

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 jitendra etikala answered over 2 years ago

To determine the residential status of a HUF, the first step is to ascertain whether the HUF is resident or a non-resident. If the HUF turns to be a resident, then the next step is to ascertain whether it is resident and ordinarily resident or is resident but not ordinarily resident. Step 1 given below will ascertain whether the HUF is resident or non-resident and step 2 will ascertain whether the HUF is ordinarily resident or not ordinarily resident. Step 2 is to be performed only if the HUF turns to be a resident. Step 1: Determining whether resident or non-resident For the purpose of Income-tax Law, a HUF will be treated as resident in India, if the control and management of the affairs of the HUF is located (partly or wholly) in India. Step 2: Determining whether resident and ordinarily resident or resident but not ordinarily resident A resident HUF will be treated as resident and ordinarily resident in India during the year if its manager (i.e. karta or manager) satisfies both the following conditions : (1) He is resident in India for at least 2 years out of 10 years immediately preceding the relevant year. (2) His stay in India is for 730 days or more during 7 years immediately preceding the relevant year. A resident HUF whose manager (i.e. karta or manager) does not satisfy any of the aforesaid conditions or satisfies only one of the aforesaid conditions will be treated as resident but not ordinarily resident. In short, following test will determine the residential status of a HUF : If the control and management of the affairs of the HUF is located (partly or wholly) in India and the manager (i.e. karta or manager) satisfies both the conditions specified at step 2, then the HUF will become resident and ordinarily resident in India. If the control and management of the affairs of the HUF is located (partly or wholly) in India and the manager (i.e. karta or manager) satisfies none or only one condition specified at step 2, then the HUF will become resident but not ordinarily resident in India. If the control and management of the affairs of the HUF is located wholly outside India, then the HUF will become non-resident.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

A Hindu undivided family is said to be a resident in India if the control and management of its affairs is wholly or partly situated in India. A Hindu undivided family is a non-resident in India if the control and management of its affairs is wholly situated out of India. In order to determine whether a Hindu Undivided Family is a resident or a non-resident, the residential status of the karta of the family during the previous year is not relevant. Residential status of the karta during the preceding years is considered for determining whether a resident family is ordinarily resident.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 karishma answered over 2 years ago

Dear Friend, Generally the residential status of HUF is determined in 2 parts. In the first part it is determined whether it is Resident or Non Resident. If the HUF is resident then it is to be determined whether it is ordinarily resident or Not Ordinarily resident. In the first part the residential status is calculated on the basis of control and management of the business and in the second part the residential status is decided on the basis of residential status of karta. Hope this helps you.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

Dear Friend, A Hindu undivided family is said to be a resident in India if the control and management of its affairs is wholly or partly situated in India. A Hindu undivided family is a non-resident in India if the control and management of its affairs is wholly situated out of India. In order to determine whether a Hindu Undivided Family is a resident or a non-resident, the residential status of the karta of the family during the previous year is not relevant. A resident Hindu Undivided Family is an ordinarily resident in India if the karta or the manager of the family (including the successive kartas) satisfies the following two additional conditions laid down:- 1) Karta has been a resident in India in at least 2 out of the 10 previous years immediately preceding the relevant previous year. 2) The karta has been present in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year. If the karta or the manager of a resident Hindu Undivided Family does not satisfy the two additional conditions, the family is treated as resident but not ordinarily resident in India.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 nayan answered over 2 years ago

Dear friend your question is about How to determined the residential status of the Hindu Undivided Family ( HUF ) for the purpose of the income tax act. For determining the residential status of the Hindu Undivided Family you must to determined the residents status of the Karta of the Hindu Undivided Family. If the karta of the HUF is residents in India than for the purpose of income tax the resident status of HIF also residents of india . If the karta has satisfied the conditions mentioned in the income tax act ,1961 for determine ing residents status of the karta of the HUF .then the HUF deemed to be the residents of india.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 2 years ago

A Hindu undivided family is said to be a resident in India if the control and management of its affairs is wholly or partly situated in India. A Hindu undivided family is a non-resident in India if the control and management of its affairs is wholly situated out of India. In order to determine whether a Hindu Undivided Family is a resident or a non-resident, the residential status of the karta of the family during the previous year is not relevant. Residential status of the karta during the preceding years is considered for determining whether a resident family is ordinarily resident. In the above explanation “control and management” means de facto control and management and not merely the right to control or manage. Control and management is situated at a place where the head, the seat and the directing powers are situated. The mere fact that the family has a house in India, where some of its members reside or the karta is in India in the previous year, does not constitute that place as the seat of control and management of the affairs of the family unless the decisions concerning the affairs of the family are taken at that place. Although, it is the karta who normally has control and management of the affairs of a Hindu Undivided Family yet any other coparcener can control and manage the affairs. Therefore, the mere fact of absence of the karta does not make the family non-resident. . Thanks

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Open uri20170510 32134 1jb1dwr?1494421680 Vaibhav answered over 2 years ago

how to find out the residential status of a Hindu Undivided Family [Sec. 6(2)] A Hindu undivided family is said to be a resident in India if the control and management of its affairs is wholly or partly situated in India. A Hindu undivided family is a non-resident in India if the control and management of its affairs is wholly situated out of India. In order to determine whether a Hindu Undivided Family is a resident or a non-resident, the residential status of the karta of the family during the previous year is not relevant. Residential status of the karta during the preceding years is considered for determining whether a resident family is ordinarily resident. In the above explanation “control and management” means de facto control and management and not merely the right to control or manage. Control and management is situated at a place where the head, the seat and the directing powers are situated. The mere fact that the family has a house in India, where some of its members reside or the karta is in India in the previous year, does not constitute that place as the seat of control and management of the affairs of the family unless the decisions concerning the affairs of the family are taken at that place. Although, it is the karta who normally has control and management of the affairs of a Hindu Undivided Family yet any other coparcener can control and manage the affairs. Therefore, the mere fact of absence of the karta does not make the family non-resident. How do you determine if a resident Hindu Undivided Family is ordinarily resident in India? A resident Hindu Undivided Family is an ordinarily resident in India if the karta or the manager of the family (including the successive kartas) satisfies the following two additional conditions laid down:- 1) Karta has been a resident in India in at least 2 out of the 10 previous years immediately preceding the relevant previous year. 2) The karta has been present in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year. If the karta or the manager of a resident Hindu Undivided Family does not satisfy the two additional conditions, the family is treated as resident but not ordinarily resident in India.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 sairam answered over 2 years ago

Residential status of HUF : Resident : control and management of its affairs is situated wholy or partly situated in India Non Resident : control and management of its affairs is situated wholly situated out side India **Control and Mangament:** Control and management of business is said to be situated at a place where the head and brain of the organisation is situated. If HUF is resident, then the status of the karta determines whether it is resident and ordinary resident or resident but not ordinary resident . If the karta is resident and ordinary resident then the HUF is resident and ordinary resident and if karta is resident but not ordinary resident , then HUf resident but not ordinary resident

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