The residential status of a company is to be determined on the basis of its incorporation or registration. Section 6(3) provides the following tests in this connection.
1. Resident [Section 6(3)]
A company is resident in India if:
(i) it is an India company, or
(ii) during the previous year, control and management of its affairs is situated wholly in India.
2. Not Ordinarily Resident
A company cannot have this status. It can either be resident or non-resident.
3. Non-Resident [Section 2(30)]
A company shall be ‘non-resident’ if it is not resident in India during the relevant accounting year.
It means that, a company whose control and management is situated wholly or partially outside India, will be non-resident company.