TaxTMI 
TaxTMI 
Comparison of Section 6 "Residence in India" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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.... Background & Scope Statutory hooks: Clause 6 is drawn as the residence provision in the Income Tax Bill, 2025. It provides the statutory criteria for determining residence of persons in India for a tax year. Coverage includes individuals, Hindu undivided families, firms, associations of persons, companies and "every other person." Definitions or specific explanations supplied in the clause include a working definition of "place of effective management" for companies and a contained definition of "income from foreign sources" relevant to certain sub-sections. No further definitions (e.g., "person of Indian origin") are provided in the text. Statutory Provision Mode Text & Scope Clause 6 establishes multiple streams for determining resi....
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....d management of affairs is situated wholly outside India in that year. * Deeming across sources: If a person is resident for any source of income, they shall be deemed resident for each of the other sources in that year. Interpretation The clause combines objective day-count criteria with subjective control/management tests. The inclusion of a deeming rule (sub-section (12)) is plainly intended to avoid source-by-source fragmentation of residency. The income-linked deeming rule in sub-section (7) (and linked sub-section (5) modifying the 60-day threshold to 120 days for higher incomes) shows a legislative intent to capture high-income citizens/PIOs who are effectively not taxed elsewhere. The POEM formulation follows established interna....
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....nd contemplates rules/prescription for counting days for ship crew; no other Rules/Notifications/Circulars are mentioned. The provision for POEM aligns with international tax principles and likely interacts with tax treaty tie-breaker rules, though such interplay is Not stated in the document. Differences between Section 6 (Income-tax Act, 2025 [As Passed]) and Clause 6 (Income Tax Bill, 2025 - Old Version) and their Practical Impact * Sub-section (4) wording and qualification: * Old Version (Clause 6): Sub-section (4) states the proviso that sub-section (2)(b) shall not apply in the case of an individual who (a) is a citizen of India or a person of Indian origin; and (b) who being outside India, comes on a visit to India in any ta....
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....ompany residence (Indian company or place of effective management in India) remains the same. * Sub-section (4) exception scope language: * Old Version: Sub-section (4) states the proviso without stating any saving or subject to clause (5); clause (5) exists but refers to "for that year". * As Passed: Sub-section (4) is expressly followed by "subject to the provisions of sub-section (5)", making the relationship explicit. * Practical impact: Clarifies legislative intent in As Passed that the exception for citizens/PIOs visiting India is subject to income-based modification in sub-section (5). The Old Version left the relationship implicit and could have been read more ambiguously. The clarification reduces interpretive dispu....
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....ng clarifications, a small typographical duplication in As Passed, and clearer express linkage between the visiting citizen/PIO exception and the income-based modification. Substance of the residency tests - 182-day test, 60-day/365-day test (with modification to 120 days where income threshold met), deemed residence where not taxable elsewhere, company/PEM tests, and not ordinarily resident conditions - remain substantially intact between the Old Bill and As Passed text. Practically, the As Passed text reduces ambiguity on the interplay of sub-sections (4) and (5) and potentially increases residency capture for higher-income returning citizens/PIOs. Practical Implications * Compliance areas: Taxpayers must maintain precise day-count rec....