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Residential Status of Company

Residential Status of Company under Income Tax Act, 1961 / Resident Company

A Company to get a resident in India (resident company) status must fulfill any one of the following two conditions, as per the sub-section 3 of the section 6 of the Income Tax Act, 1961 (herein after referred as "IT Act").

(i) it must be an Indian company ; or

(ii) the control and management of its affairs must be situated wholly in India during the previous year for which it will be resident in India.

If none of the above condition is satisfied, then the company would be 'Non-resident Company'.

An Indian company, as mentioned above, is defined in the section 2(26) of the IT Act.
N.B.: A Company may be either resident or non-resident in India but it can not be ordinary or non-ordinary residence like it happens in case of individuals or for assesses as defined under the IT Act.

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