Residential status
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 January 2016
If control and managent of businness of huf is wholy or partly from india then huf is said to be resident.
Now status of karta will decide whether the huf is ordinarily or not ordinarily resident.
If karta is non resident, what will be status of huf, ordinarily or not ordinarily resident..?
11 January 2016
A. In a situation where control & management of HUF's affairs is situated wholly outside India-
and Karta is also a non resident- then the HUF will be a Non Resident.
B. In a situation where control & management of HUF's affairs is not situated wholly outside India then the HUF is a Resident. In fact to decide whether the HUF is a not ordinarily resident-
we have to put 2 tests on the Karta -
1. Non Resident in 9 out of 10 PP yrs ,or
2. Stayed in India for 729 Days or less in 7 PP Yrs.
So, here we have to see Karta's stay in India in Preceding Previous years also , if we would like to categorise the HUF as a not ordinarily resident.
and Karta is also a non resident- then the HUF will be a Non Resident.
B. In a situation where control & management of HUF's affairs is not situated wholly outside India then the HUF is a Resident. In fact to decide whether the HUF is a not ordinarily resident-
we have to put 2 tests on the Karta -
1. Non Resident in 9 out of 10 PP yrs ,or
2. Stayed in India for 729 Days or less in 7 PP Yrs.
So, here we have to see Karta's stay in India in Preceding Previous years also , if we would like to categorise the HUF as a not ordinarily resident.
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 January 2016
yes, above test is possible only when karta is resident but what if huf is resident and karta is " non resident " in py then how to decide that huf is ordinarily or not ordinarily resident in p.y ...?
22 July 2025
The question here revolves around determining the residential status of a Hindu Undivided Family (HUF) and whether it is ordinarily resident (OR) or not ordinarily resident (NOR) when the Karta is a non-resident.
Understanding the Residential Status of HUF:
The HUF can be considered resident if the control and management of its business or affairs is wholly or partly situated in India. If this control is entirely outside India, then the HUF will be considered a non-resident.
When the Karta is Non-Resident:
When the Karta is non-resident, the residential status of the HUF depends on two key factors:
Control and management of the affairs of the HUF:
If the control and management of the HUF’s affairs is wholly outside India, the HUF will be non-resident.
If the control and management is partly or wholly in India, the HUF will be resident in India.
Determining whether the HUF is Ordinarily Resident (OR) or Not Ordinarily Resident (NOR):
To decide whether the HUF is ordinarily resident or not ordinarily resident, you look at the Karta's residential status in previous years. Specifically, the Karta’s residential status is the determining factor for whether the HUF is ordinarily resident or not ordinarily resident.
Tests for "Not Ordinarily Resident" (NOR) Status:
If the Karta is a resident but the HUF is a resident, then to determine if the HUF is ordinarily resident or not ordinarily resident, two tests are applied to the Karta:
Test 1: The Karta must have been a non-resident in 9 out of the 10 preceding previous years.
Test 2: The Karta must have stayed in India for 729 days or less in the 7 preceding previous years.
Now, to answer your question: What happens if the Karta is a non-resident but the HUF is a resident?
The Answer:
If the Karta is a non-resident but the HUF is a resident, the HUF's residential status is determined based on the location of the control and management of the HUF’s affairs (as mentioned earlier). If the control and management is wholly or partly in India, then the HUF will be a resident.
For determining whether the HUF is "ordinarily resident" or "not ordinarily resident", we apply the tests related to the Karta's stay in India.
If the Karta has stayed in India for less than 729 days in the last 7 years, then the HUF will be considered not ordinarily resident (NOR).
If the Karta satisfies the conditions for "ordinary resident", then the HUF will be ordinarily resident.
Example:
If the Karta is a non-resident in the current year but has been a resident in prior years, and the HUF has control and management partly in India, then the HUF will be a resident.
Whether the HUF is ordinarily resident or not ordinarily resident will depend on the Karta’s stay in India in the last 7 years.
Conclusion:
If the HUF is a resident (because the control and management is in India or partly in India), and the Karta is a non-resident, the HUF's status (ordinarily or not ordinarily resident) will be based on the Karta's residential status in previous years and how long the Karta has stayed in India.
The HUF will be not ordinarily resident (NOR) if the Karta meets the criteria for NOR, and ordinarily resident (OR) otherwise.
Understanding the Residential Status of HUF:
The HUF can be considered resident if the control and management of its business or affairs is wholly or partly situated in India. If this control is entirely outside India, then the HUF will be considered a non-resident.
When the Karta is Non-Resident:
When the Karta is non-resident, the residential status of the HUF depends on two key factors:
Control and management of the affairs of the HUF:
If the control and management of the HUF’s affairs is wholly outside India, the HUF will be non-resident.
If the control and management is partly or wholly in India, the HUF will be resident in India.
Determining whether the HUF is Ordinarily Resident (OR) or Not Ordinarily Resident (NOR):
To decide whether the HUF is ordinarily resident or not ordinarily resident, you look at the Karta's residential status in previous years. Specifically, the Karta’s residential status is the determining factor for whether the HUF is ordinarily resident or not ordinarily resident.
Tests for "Not Ordinarily Resident" (NOR) Status:
If the Karta is a resident but the HUF is a resident, then to determine if the HUF is ordinarily resident or not ordinarily resident, two tests are applied to the Karta:
Test 1: The Karta must have been a non-resident in 9 out of the 10 preceding previous years.
Test 2: The Karta must have stayed in India for 729 days or less in the 7 preceding previous years.
Now, to answer your question: What happens if the Karta is a non-resident but the HUF is a resident?
The Answer:
If the Karta is a non-resident but the HUF is a resident, the HUF's residential status is determined based on the location of the control and management of the HUF’s affairs (as mentioned earlier). If the control and management is wholly or partly in India, then the HUF will be a resident.
For determining whether the HUF is "ordinarily resident" or "not ordinarily resident", we apply the tests related to the Karta's stay in India.
If the Karta has stayed in India for less than 729 days in the last 7 years, then the HUF will be considered not ordinarily resident (NOR).
If the Karta satisfies the conditions for "ordinary resident", then the HUF will be ordinarily resident.
Example:
If the Karta is a non-resident in the current year but has been a resident in prior years, and the HUF has control and management partly in India, then the HUF will be a resident.
Whether the HUF is ordinarily resident or not ordinarily resident will depend on the Karta’s stay in India in the last 7 years.
Conclusion:
If the HUF is a resident (because the control and management is in India or partly in India), and the Karta is a non-resident, the HUF's status (ordinarily or not ordinarily resident) will be based on the Karta's residential status in previous years and how long the Karta has stayed in India.
The HUF will be not ordinarily resident (NOR) if the Karta meets the criteria for NOR, and ordinarily resident (OR) otherwise.
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