NON RESIDENT- INTERNATIONAL TAXATION

NON RESIDENT

NON RESIDENT means a person who is not Resident and includes a person who is not an Ordinary Resident within the meaning of Sec. 6(6)-[sec. 2(30)]

NON RESIDENT DIAGRAM 

RESIDENTIAL STATUS

HOW TO DETERMINED A RESIDENTIAL STATUS OF INDIVIDUAL/HUF/COMPANY (WHETHER IS INDIAN OR OTHER COMPANY)/FIRM/AOP/BOI/OTHER PERSON

• IN THE CASE OF INDIVIDUAL THEN RESIDENTIAL STATUS SHALL BE DETERMINED:-

Individual is satisfied with any one of the following conditions of the resident then the individual is a resident.

182 DAYS OR MORE RESIDENT IN INDIA

                OR

60 DAYS OR MORE +365 DAYS OR MORE DURING THE 4 P.Y.  IMMEDIATELY PRECEDING THE RELEVANT P.Y.

Individual is satisfied both of the following conditions of the Ordinary Resident then the individual is a resident.

ATLEAST 2 OUT OF 10 P.Y. IMMEDIATELY PRECEDING THE RELEVANT P.Y.

+

730 DAYS OR MORE DURING 7P.Y IMMEDIATELY PRECEDING THE RELEVANT P.Y.

• IN THE CASE OF HUF THEN RESIDENTIAL STATUS SHALL BE DETERMINED:-

In the conditions of Resident:- IF HUF Management is wholly or partly situated in India then HUF IS RESIDENT and,

In the conditions of Ordinary Resident:- Karta satisfied all the condition it's given below:-

ATLEAST 2 OUT OF 10 P.Y. IMMEDIATELY PRECEDING THE RELEVANT P.Y.

+

730 DAYS OR MORE DURING 7P.Y IMMEDIATELY PRECEDING THE RELEVANT P.Y.

• IN THE CASE OF FIRM/ AOP/ BOI / OTHER PERSON THEN RESIDENTIAL STATUS SHALL BE DETERMINED:-

In the conditions of Resident:- IF FIRM/AOP/BOI/OTHER PERSON Management is wholly or partly situated in India then FIRM/AOP/BOI/OTHER PERSON IS RESIDENT and,

In the conditions of Ordinary Resident: - IT’S NOT APPLICABLE FOR FIRM/AOP/BOI/OTHER PERSON.

• IN THE CASE OF COMPANY THEN RESIDENTIAL STATUS SHALL BE DETERMINED:-

 INDIAN COMPANY: - ALWAYS BE RESIDENT AND,

 THE OTHER COMPANY:-  POEM in India. Then the company will be resident otherwise non resident.

IBC-SECTION 52 TO SECTION 54

Section 52 Secured creditor in liquidation proceedings  

INSOLVENCY & BANKRUPTCY CODE SECTION 52 SECURED CREDITOR IN LIQUIDATION PROCEEDINGS

• A secured creditor in the liquidation proceedings may relinquish its security interest to the liquidation estate and realize its security interest in the manner specified in this section, he shall inform the liquidator of such security interest and identify the asset subject to such security interest to be realized.

• Enforcement of the security interest yields an amount by way of proceeds which is in excess of the debts due to secured creditor, the secured creditor shall account to the liquidator for such surplus and tender to the liquidator any surplus funds received from the enforcement of such secured assets.

• Proceeds of the realization of the secured assets are not adequate to repay debts owed to the secured creditor, the liquidator shall be paid all the unpaid debts to the secured creditors in the manners as specified by the board.

SECTION 52 CHART

Section 53 Distribution of assets  

INSOLVENCY & BANKRUPTCY CODE SECTION 53 DISTRIBUTION OF ASSETS 

1. Sale of the liquidation assets and which amount to be generated shall be distributed in the following order of priority and within such period as may be specified by the board. Insolvency resolution process costs and liquidation costs paid in full to the liquidator.
2. The following debts shall be rank equally and shall be paid by the liquidator to the creditors or workmen’s due for the period of 24 months preceding the liquidation commencement date and debts owned to a secured creditor in the event such secured creditor has relinquished security in the manner set out in section 52.
3. Wages and any unpaid dues owed to employees.
4. Financial debts owed to unsecured creditors.
5. Any contractual arrangement between recipients under subsection (1) with equal ranking if disrupting the order of priority under that sub-section shall be disregarded by the liquidator.
6. Fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each of the class of recipients under sub-section(1).
7. For this section its hereby clarified that each stage of the distribution of proceeds in respect of a class of recipients that rank equally, each of the debts will be either be paid in full or in equal proportion within the same class of recipients.

SECTION 53 CHART

Section 54 Dissolution of Corporate Debtor

INSOLVENCY & BANKRUPTCY CODE SECTION 54 DISSOLUTION OF CORPORATE DEBTOR 

• Where the assets of the corporate debtor have been completely liquidated then the liquidator shall make an application to the NCLT for the dissolution of such corporate debtor.

• The NCLT shall on an application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that and the corporate debtor shall be dissolved accordingly and copy of the order under sub-section (2) shall be within 7 days from the date of such order be forwarded to the authority with which the corporate debtor is registered.

SECTION 54 CHART

IBC-SECTION 35 TO SECTION 37

Section 35 Powers and duties of Liquidator

INSOLVENCY AND BANKRUPTCY CODE, SECTION 35 POWERS AND DUTIES OF LIQUIDATOR

The liquidator shall have the following powers and duties, namely:- 

1. To verify the claims of all the creditors.
2. To take into custody & control all the assets, property, effects, and actionable claims of the corporate debtor.
3. To evaluate the assets and property of the corporate debtor.
4. To take such measures to protect & preserve the assets and properties of the corporate debtor.
5. To carry on the business of the corporate debtor for its beneficial liquidation.
6. Sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by the Public auction.
7. To draw, accept, make, and endorse any negotiable instruments.
8. To obtain any professional assistance from any person.
9. To invite and settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this code.
10. To investigate the financial affairs of the corporate debtor to determine undervalued or preferential transactions.

SECTION 35 CHART

Section 36 liquidation estate

INSOLVENCY AND BANKRUPTCY CODE, SECTION 36 LIQUIDATION ESTATE

The liquidator shall hold liquidation estate as a fiduciary for the benefit of all the creditors.

All liquidation estate assets which shall include the following:- 

1. All the assets of the corporate debtor have ownership rights, including all rights and interests therein as evidenced in the balance sheet of the corporate debtor then the liquidator shall hold this assets as a liquidation estate.
2. If the assets that may or may not be in possession of the corporate debtor including but not limited to encumbered assets then the liquidator shall hold assets as a liquidation estate.
3. Tangible assets whether assets it's movable or immovable.
4. Intangible assets include but not limited to intellectual property, securities (including shares held in a subsidiary of the corporate debtor) and financial instruments, insurance policies, contractual rights.
5. Assets of the corporate debtor subject to the determination of ownership by the court.
6. Any assets of the corporate debtors in respect of which a secured creditor has relinquished security interest.
7. Any other property belonging to the corporate debtor at the insolvency commencement date.
8. All proceeds of liquidation as and when they are realized.

SECTION 36 (i) CHART

The following shall not be included in the liquidation estate assets and shall not corporate debtor.

1. Assets owned by a third party which is in the possession of the corporate debtor then such assets shall not be included as a liquidation estate of the corporate debtor.
2. Assets in security collateral held by the financial services providers.
3. Personal assets of any shareholder/partner of a corporate debtor as the case may be provided such assets are not held on account of avoidance transactions that may be avoided under this chapter.
4. Any assets of any Indian or subsidiary of the corporate debtor.
5. Any other assets as may be specified by the board.

SECTION 36 (ii) CHART

Section 37 Consolidation of claims, Verification of claims, Admission or Rejection claims, Determination of valuation of claims, Appeal against the decision of liquidator.

INSOLVENCY AND BANKRUPTCY CODE, SECTION 37 CONSOLIDATION OF CLAIMS, VERIFICATION /ADMISSION/REJECTIONS OF CLAIMS, DETERMINATION OF VALUATION OF CLAIMS, APPEAL AGAINST THE DECISION OF LIQUIDATOR.

Combine effect of all the above section:- Liquidator to collect claims in 30 days, then verifications of all claims are done, the liquidator may accept or reject claims.

Note:- creditor has 14 days to alter claims amount after submission also they have the right to appeal to NCLT.

IBC- SECTION 33 TO SECTION 34

Section 33 Initiation of Liquidation 

INSOLVENCY AND BANKRUPTCY CODE, SECTION 33 INITIATION OF LIQUIDATION 

• Where the NCLT before the expiry of the CIRP period does not receive a resolution plan or the maximum period permitted for completion of the CIRP is 270 days under section 12 if the NCLT does not receive a resolution plan.

• NCLT rejects the resolution plan u/s31 for the non- compliance with the requirements specified therein.

1. Pass an order requiring the corporate debtor to be liquidated.
2. Issue a public announcement and require such order to be sent to the authority 

• Where the RP at any time during the CIRP but before the confirmation of the resolution plan, then RP intimates the NCLT of the decision of the COC approved by not less than 66% of the voting share to liquidate the corporate debtor, the NCLT shall pass a liquidation order.

• Where the resolution plan approved by the NCLT is contravened by the concerned corporate debtor, make, make an application to NCLT for a liquidation order.

• On receipt of an application if the NCLT determines that the corporate debtor has contravened the provisions of the resolution plan then NCLT pass a liquidation order.

• The Order of liquidation shall be deemed to be a notice of discharge to the officers, employees, and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator.

SECTION 33-CHART

Section 34 Appointment of liquidator and fee to be paid 

INSOLVENCY AND BANKRUPTCY CODE, SECTION 34 APPOINTMENT OF LIQUIDATOR AND FEE TO BE PAID 

1. Where the NCLT passes an order for liquidation of the corporate debtor:- RP appointed for the CIRP shall, subject to submission of a written consent by the RP is given to NCLT in the specified form shall act as liquidator for the purposes of liquidation unless by the NCLT.
2. All the powers of the BOD/KMP & partners of the corporate debtor, shall cease to have effect and shall be vested in the liquidator.
3. Personnel of the corporate debtor shall extend all assistance and cooperation to the liquidator.
4. NCLT pass an order to replace the RP, if RP submitted the resolution plan u/s 30 was rejected by NCLT because does not meet the specified requirement mentioned in sub-section (2) of section 30. And also the Board recommends the replacement of an RP to the NCLT for reasons to be recorded in writing the RP fails to submit written consent under sub-section (1).
5. NCLT may direct the Board to propose names of another IP.
6. The Board shall propose the name of another IP within 10 days of the direction issued by the NCLT.
7. NCLT shall, on receipt of the proposal of the board for the appointment of an IP as liquidator of the corporate debtor.
8. IP proposed to be appointed as a liquidator shall such fee for the conduct of the liquidation proceeding to be paid and in such proportion to the value of the liquidation estate assets of the corporate debtor, as may be specified by the board.

SECTION 34-CHART