CS Executive · Tax Laws and Practice · Basic Concept of Income Tax
Under the Income-tax Act, 2025, a company is resident in India for a tax year if which of the following is true?
A company is resident in India for a tax year if it is an Indian company or if its place of effective management is in India in that year. Shareholder nationality and the share of income earned in India are not the tests.
- AIt is an Indian company, or its place of effective management is in India in that yearCorrect
- BIts control and management is situated wholly in India
- CIts shareholders are majority Indian citizens
- DIt earned more than half of its income in India
Explanation
Section 6(10) makes a company resident if it is an Indian company or its place of effective management is in India in that tax year. Ownership or the source of income is not the test, and the wholly-in-India control test is the old formulation, not the one in the text.
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