RESIDENTIAL STATUS OF HUF

Resident: A HUF would be resident in India if the control and management (ie. both) of its affairs is situated wholly or partly in India. 

Non-resident: If the control and management of the affairs is situated wholly outside India it would become a non-resident. 

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Resident and ordinarily resident/Resident but not ordinarily resident 

If the HUF is resident, then the status of the Karta determines whether it is resident and ordinarily resident or resident but not ordinarily resident. 

• If the karta is resident and ordinarily resident, then the HUF is resident and ordinarily resident.

• If the karta is resident but not ordinarily resident, then HUF is resident but not ordinarily resident.

Meaning of the term “control and management” 

• The expression ‘control and management’ referred to under section 6 refers to the central control and management and not to the carrying on of day-to-day business by servants, employees or agents.
  
• The business may be done from outside India and yet its control and management may be wholly within India. Therefore, control and management of a business is said to be situated at a place where the head and brain of the adventure is situated.
  
• The place of control may be different from the usual place of running the business and sometimes even the registered office of the assessee. This is because the control and management of a business need not necessarily be done from the place of business or from the registered office of the assessee.
  
• But control and management do imply the functioning of the controlling and directing power at a particular place with some degree of permanence.
  

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Status of KARTA is referred as Individual for ROR or RNOR  as below-

• Only INDIVIDUALS and HUFs can be resident but not ordinarily resident (ROR) in India. 
• All other classes of assessees can be either a resident or non-resident. 
• A not-ordinarily resident person (NOR) is one who satisfies ANY ONE of the conditions specified under section 6(6).

. (i)  If such KARTA has been NON-RESIDENT in India in any 9 out of the 10 previous years PRECEDING the relevant previous year, or ( Resident = in ANY 2years = Out of last 10years Preceding years)

. (ii)  If such KARTA has during the 7 previous years preceding the relevant previous year been in India for a period of 729 days or less (=less 729days) (ie. Stay in India +=730days in LAST 7 preceding years).

If the KARTA satisfies both the conditions mentioned above, HUF is a resident and ordinarily resident but if only one or none of the conditions are satisfied, the HUF is a resident but not ordinarily resident.