Residential Status of HUF
Only individuals and HUF can be resident but not ordinarily resident in India.
When HUF becomes Resident?
If the Control and Management of its affairs are situated wholly or partly in India, then HUF is said to be resident in India.
When HUF becomes Non- Resident?
If the control and management of its affairs are situated wholly outside India it would become a non-resident.
When HUF becomes Resident and ordinarily resident/ Resident but not ordinarily resident?
For HUF to be (ROR)/ (RNOR) Karta needs to satisfy both the following two additional conditions:
1. Karta of resident HUF should be resident in at least 2 previous years out of 10 previous years immediately preceding the relevant previous year.
AND
2. Stay of Karta during the 7 previous years immediately preceding relevant previous year should be 730 days or more.
If Karta is a resident and ordinarily resident then a resident HUF also becomes resident and ordinarily resident.
If Karta is resident but not ordinarily resident then a resident HUF also becomes resident but not ordinarily resident
Control and management mean central control and management should be in India. Not carrying day-to-day business activities by servants, employees, or agents.
To determine residential status of HUF:
First check where control and management of its affairs ?
Situated wholly or partly in India then further check the status of Karta. Karta is ROR then HUF is ROR. Karta is RNOR HUF also becomes RNOR.
Situated wholly outside India then HUF is non resident.
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