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CA Intermediate · Taxation · Residential Status and Scope of Total Income

Sunrise Traders LLP has its partners holding the control of its affairs from Chennai, with all key management decisions taken there throughout tax year 2026-27. Which statement about its residential status is correct?

The LLP is resident in India. A partnership firm, LLP or other association of persons is resident unless control and management of its affairs is situated wholly outside India during the tax year. Since all key decisions are taken in Chennai, the condition for non-residence fails.

  1. AIt is resident because its control and management is wholly in IndiaCorrect
  2. BIt is resident only if it has Indian-source income above Rs 15 lakh
  3. CIt is non-resident as it is not a company
  4. DIt is resident only if all partners are Indian citizens

Explanation

A firm, LLP or other association of persons is resident in India unless the control and management of its affairs is situated wholly outside India during the year. Here the control and management is wholly in India, so it is resident. Citizenship of partners and income level do not matter for this test. Being a non-company does not make it non-resident.

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