## Residential Status of HUF [Section 6(2)]

### Step 1: Resident or Non-Resident

Control & Management of HUF's affairs	Status
Wholly OR Partly in India	Resident
Wholly outside India	Non-Resident

### Step 2: ROR or RNOR (only if Resident)

Check if the Karta satisfies both the Additional Conditions [as in Sec 6(6)]:

Yes → HUF is ROR.
No → HUF is RNOR.

## Residential Status of Firm / AOP / BOI / Local Authority / Artificial Juridical Person

Control & Management	Status
Wholly OR Partly in India	Resident
Wholly outside India	Non-Resident

There is no concept of ROR/RNOR for these entities.

### Key Notes on 'Control & Management'

1. Central Control & Management — not the day-to-day business carried on by employees/servants/agents.

2. Means de facto (actual) control, not the mere right to control.

3. Business may be conducted outside India yet control & management could be wholly in India.

4. Merely owning a house in India does not establish C&M in India.

5. If important decisions concerning HUF's affairs are taken in India → C&M is in India.

Worked example

### Example 1

Example: A HUF's Karta operates from London, and all major decisions are taken in London. The HUF owns property in India.

Solution: C&M is wholly outside India (mere property in India does not equate to C&M in India). → Non-Resident HUF.

### Example 2

Example: A partnership firm with all partners in India makes all major business decisions in India but exports goods to USA.

Solution: C&M is wholly in India → Resident Firm, even though all business is done abroad.

⚠️ Common exam mistakes

For HUF, checking Karta's additional conditions BEFORE confirming HUF is a Resident.
Applying ROR/RNOR concept to Firms / AOPs — they are only Resident or Non-Resident.
Confusing C&M (high-level decisions) with day-to-day operations.
Assuming that location of business operations determines C&M — it is location of decision-making that matters.

Bare-Act text Section 6(2) · Income-tax Act, 1961 · click to expand

A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

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Residential Status of HUF, Firm, AOP, BOI, Local Authority, AJP

Worked example

⚠️ Common exam mistakes