CMA Final · Direct Tax Laws and International Taxation · Assessment of Individuals including Non-residents
Kavita, a citizen of India, stays in India for 190 days in the current tax year. Of the ten tax years preceding the current year, she was non-resident in six. During the seven tax years preceding the current year she was in India for a total of 730 days. What is her status for the current tax year?
Kavita is resident and ordinarily resident. She meets the 182-day test, but neither exception to ordinary residence applies: she was non-resident in only six of ten years, not nine, and her seven-year stay of 730 days exceeds the 729-day limit.
- AResident but not ordinarily resident, because she was non-resident in six of the ten preceding years
- BResident but not ordinarily resident, because her stay is close to 729 days
- CResident and ordinarily residentCorrect
- DNon-resident
Explanation
With 190 days she is resident under the 182-day test. To be not ordinarily resident under section 6(13)(a) she must have been non-resident in nine of the ten preceding years, or in India for 729 days or less in the seven preceding years. She was non-resident in only six years, and 730 days exceeds 729. The 120-to-181-day rule in section 6(13)(b) does not apply as she stayed 190 days. She is therefore resident and ordinarily resident.
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