Categories
NRI Taxation

Residential Status as per The Income Tax Act

As per Income Tax Act, 1961, the taxability of person depends upon the Residential Status of the individual for the previous year. Residential status of an Individual is to be checked every year. Section 6 of the Income Tax Act defines the criteria for determining residential of an Individual. Recently by The Finance Act, 2020, government made certain changes in the criteria to determine the Residential Status.

As per IT Act, residential status is divided in to 3 categories, we shall understand the each categories in this article:

  1. Resident
  2. Resident but not ordinary resident
  3. Non-Resident
Categories
GST

GST Implication under IBC Code on Corporate Debtors

In this article we will understand implication of GST on corporate debtors under IBC. When entity defaults certain threshold amount then CIRP (Corporate Insolvency Resolution Process) is initiated. Here we will understand, when new GST registration is required, how we can avail GST input credit and how we can claim refund of GST paid.

Special procedure shall follow by the Special Class of Person:

  • Notification No. 11/2020 [Central tax] dated 21/03/2020 is issued prescribing the special procedure for corporate debtors under the provision of Insolvency and Bankruptcy Code (IBC) Code, 2016.
  • As per the provisions of IBC, once an entity defaults certain threshold amount, Corporate Insolvency Resolution Process (hereafter referred to as “CIRP”) gets triggered.
  • After undergoing the corporate insolvency resolution process, the management of that default corporate debtor is undertaken by IRP / RP. (IRP = Interim resolution professional and RP = Resolution professional)
  • “Corporate debtors” under IBC are now special class of person shall follow the following special procedure from the date of appointment of IRP / RP till the corporate insolvency resolution process is over and order passed by NCLT (National Company Law Tribunal).