Residential Status of the HUF under I.T. Act.1956

 

The Assessment of income under the Income-tax Act, 1961/Wealth-tax Act, 1957 is always based on the Residential Status of a Person.


The Residential status of a person under the Income-tax Act, 1961 is determined according to Section 6 of the Income-tax Act, 1961. ‘The Income-tax Act, 1961 recognises three types of status in respect of any person and they are:-


1. Resident


2. Non-Resident


3. Not Ordinarily resident


The Residential Status of HUF is governed by Section 6(2) and 6(6) of the Income-tax Act, 1961 which reads as follows: -


Section 6(2)


A Hindu Undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.


Thus, a HUF is deemed to be a resident of India unless the control and management of its affairs is situated wholly outside India. In relation to HUF, we have seen that the Control and management is vested with Karta and therefore if the Karta of the HUF stays outside India and controls and manages the affairs froxt outside India, the HUF would be (a) turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 40 lacs but does not exceed Rs. 50 Crores. Turnover for this purpose doesn’t include other income.


(b) Borrowings, including public deposits are in excess of Rs. 1 crore but not in excess of Rs. 10 crores at any time during the accounting period.


1. All the accounting standards as specified above


3. Special HUF (Also known as Level I enterprises for the purpose of Accounting Standards)


Further in respect of those HUFs whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 50 Crores or whose borrowings including public deposits is in excess of Rs. 10 Crores at any time during the accounting period, all the Accounting Standards are applicable. However, there are certain Accounting Standards which by their very nature are applicable only in case of Listed Companies and therefore, they are not applicable to HUFs falling under Level I enterprise.

MORE TOPICS ....

HUF -  Capital Gain Account
HUF -  Deduction from HUF Business Income
Income Derived From Funds Of HUF -Whether Individual Income Or Family Income
Gift by HUF to its Member
Gift To Minor Daughters Out Of HUF Property Prior To Marriage
Gift of HUF Property to Stranger or to any Person who is a Alien to HUF
Clubbing Provisions In Case Of Gifts Received By HUF
Applicability of Clubbing Provisions in case Karta of a HUF is a Partner in a Firm
Gifts received by HUF from Aliens / Strangers
HUF - Investment Options
Concept of Multiple HUF’s
Whether a Single Member can Constitute a HUF ?
Whether any Limit is placed on Number of Members of a HUF ?
Whether HUF- Can Be Constituted with only Female Members ?
Drawings / Expenses of HUF
Whether HUF can be a Shareholder / Subscriber to the MOA ( Memorandum Of Association)  of a Company
Whether HUF can be a Member of a Cooperative Society ?
Whether HUF can be a Partner ?
Can KARTA of a HUF enter into Partnership with another Member of HUF ?
Can There Be A Partnership Between Two HUFs?
Effect Of Death Of Karta In Case Of Partnership Firm
Whether HUF Can Be A Proprietor ?
Whether HUF Can Be A Trustee / Settler ?
HUF - Aliyasantana Law
HUF - Marumakkattayam Law
Power of KARTA in relation to HUF
Managing Members in relation to HUF
Whether a Female can become a Karta ?
Tax Planning TIPS for HUF
HUF - Meaning Of Important Term- “Ancestral”
HUF - Meaning Of Important Term- “Stridhan”
HUF - Meaning Of Important Term- “Mitakshara”
HUF - Meaning Of Important Term- “ Dayabhaga”
Meaning of the term ‘Coparcener’ of HUF
Power of ‘Coparcener’ of HUF
Difference between a ‘Coparcener’ and a ‘Member’
Whether Husband / Wife Can Constitute A HUF ?
HUF - RECOVERY PROVISIONS
‘Maintenance of Accounts’ by HUF
‘Audit of Accounts’ by HUF
Applicability Of The ‘Accounting Standards’ On HUF
Whether Merger Of Two HUF is Possible ?
Residential Status of the HUF under I.T. Act.1956
‘Coparcener Property’ under HUF
 
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