Under the income tax laws in India, individuals are categorized into different types based on their nature of income and certain criteria. Here are the different types of natural persons for income tax purposes in India:
- Resident Individual:
- A resident individual is a person who qualifies as a resident under the provisions of the Income Tax Act, 1961.
- Resident individuals are subject to tax on their global income, which includes income earned within and outside India.
- They may be further classified as Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR) based on their period of stay in India.
- Non-Resident Individual:
- A non-resident individual is a person who does not qualify as a resident under the income tax laws.
- Non-resident individuals are generally taxed on income earned or received in India or income deemed to accrue or arise in India.
- They may have different tax rates and exemptions compared to resident individuals.
- Hindu Undivided Family (HUF):
- An HUF is a separate tax entity recognized under the income tax laws.
- It consists of a family that includes common ancestors and their lineal descendants.
- An HUF is taxed separately from its members and is eligible for certain deductions and exemptions.
- Partnership Firm:
- A partnership firm is a business entity formed by two or more individuals who come together with the intention of carrying on a business for profit.
- Partnership firms are not taxed separately; instead, the partners are individually taxed on their respective share of the firm’s income.
- Limited Liability Partnership (LLP):
- An LLP is a hybrid form of a partnership and a company, offering limited liability to its partners.
- LLPs are taxed similarly to partnership firms, where partners are taxed on their share of the LLP’s income.
- Association of Persons (AOP) and Body of Individuals (BOI):
- AOP and BOI are categories for individuals who come together to carry out a common purpose or earn income jointly.
- AOP and BOI are taxed separately from their members, and their income is taxed at the applicable rates.
- Trusts:
- Trusts are legal arrangements where a person (settlor) transfers assets to another person or entity (trustee) to hold and manage for the benefit of others (beneficiaries).
- Trusts are subject to specific tax provisions, and their income is taxed at the applicable rates.
- Body of Individuals (BOI):
- A Body of Individuals (BOI) is a group of individuals who come together for a joint purpose other than business.
- A BOI is taxed separately from its members, and its income is subject to tax at the applicable rates.
- Co-operative Society:
- A co-operative society is an association of individuals who come together to pool resources and work collectively for their common economic and social welfare.
- Co-operative societies are subject to specific tax provisions, and their income is taxed at the applicable rates.
- Mutual Concern:
- Mutual concerns are organizations established for the benefit of their members, where the profits or income is shared among the members.
- Mutual concerns are taxed similarly to partnership firms, where the members are taxed individually on their share of the organization’s income.
- Local Authority:
- Local authorities refer to bodies such as municipalities, panchayats, and other government bodies at the local level.
- Local authorities are subject to tax on their income, including revenue from property taxes, fees, or other sources.
- Artificial Judicial Person:
- An artificial judicial person refers to entities such as courts, tribunals, or other legal bodies that are created by law and have their own legal existence.
- These entities may have their own income and tax obligations as per the provisions of the law.
- Discretionary and Specific Trusts:
- Discretionary trusts and specific trusts are specific categories of trusts that have different rules and tax implications.
- Discretionary trusts provide the trustee with discretion in distributing the trust income among the beneficiaries, while specific trusts have specific beneficiaries and distributions.
Certainly! Here are a few more types of natural persons under the income tax laws in India:
- Individual Resident in India, but Not Ordinarily Resident (RNOR):
- RNOR is a sub-category of resident individuals who meet certain criteria regarding their period of stay in India.
- RNORs have certain tax advantages compared to resident and ordinarily resident individuals, such as exemptions on foreign income.
- Senior Citizen:
- Senior citizens are individuals who are 60 years of age or older in the relevant financial year.
- They are eligible for certain additional tax benefits, such as higher exemption limits and reduced tax rates for specific income brackets.
- Super Senior Citizen:
- Super senior citizens are individuals who are 80 years of age or older in the relevant financial year.
- They enjoy additional tax benefits compared to senior citizens, including higher exemption limits and reduced tax rates for specific income brackets..
different types of companies recognized under the corporate laws in India:
- Private Limited Company:
- A private limited company is a privately held business entity with a minimum of two and a maximum of 200 shareholders.
- It restricts the transfer of shares and prohibits public subscription to shares.
- It offers limited liability protection to its shareholders.
- Public Limited Company:
- A public limited company is a publicly held business entity that can have a minimum of seven shareholders, with no upper limit.
- It can raise capital from the public through the sale of shares on the stock exchange.
- It offers limited liability protection to its shareholders.
- One Person Company (OPC):
- A one person company is a type of private limited company that can be incorporated with just one shareholder.
- It allows a single individual to enjoy the benefits of limited liability protection.
- It is suitable for entrepreneurs who want to operate as a separate legal entity.
- Section 8 Company (Non-profit Company):
- A section 8 company is a type of company formed for promoting art, science, commerce, education, charity, or any other social or charitable cause.
- It must apply its profits or other income towards promoting its objectives and cannot distribute dividends to its members.
- It enjoys various exemptions and benefits under the Companies Act, 2013.
- Producer Company:
- A producer company is a type of company formed by farmers, agriculturists, or individuals engaged in primary production activities.
- It aims to improve the income and well-being of its members by facilitating better production, harvesting, marketing, and other related activities.
- Limited Liability Partnership (LLP):
- An LLP is a hybrid business entity that combines the advantages of both a partnership and a company.
- It offers limited liability protection to its partners and allows flexibility in managing the business.
- It is suitable for professionals and service-based businesses.
Certainly! Here are a few more types of companies recognized under the corporate laws in India:
- Foreign Company:
- A foreign company is a company incorporated outside India but has a place of business in India.
- It is subject to certain compliance requirements and regulations under the Companies Act, 2013, if it meets specific criteria.
- Holding Company:
- A holding company is a company that holds the majority of shares or controls the composition of the board of directors of another company, known as a subsidiary.
- It exercises control over its subsidiaries through ownership of shares and has the power to make decisions regarding their operations.
- Subsidiary Company:
- A subsidiary company is a company that is controlled by another company, known as the holding company.
- The holding company holds a majority of shares or has control over the composition of the subsidiary’s board of directors.
- Government Company:
- A government company is a company in which the majority of the share capital is held by the government or its agencies.
- It is formed for undertaking activities of public interest, such as infrastructure development, utilities, or public services.
- Listed Company:
- A listed company is a company whose shares are listed and traded on a recognized stock exchange.
- It must comply with additional regulations and requirements imposed by the stock exchange and securities market regulators.
- Startup Company:
- A startup company is an entity that is engaged in the development of innovative products, processes, or services.
- It meets certain criteria specified by the Department for Promotion of Industry and Internal Trade (DPIIT) for availing various benefits and concessions.
Please note that this list is not exhaustive, and there may be other specific categories or types of companies under the corporate laws in India. It is advisable to consult with a legal professional or refer to the Companies Act, 2013,