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CA Intermediate · Taxation · Residential Status and Scope of Total Income

Mr. Arjun Rao, an Indian citizen, left India on 10 June 2026 for employment in Dubai and has not visited India since. His 'previous year' concept is now the 'tax year' 2026-27 (1 April 2026 to 31 March 2027). During tax year 2026-27, he was in India for 70 days. Which statement about his residential status for tax year 2026-27 is most accurate?

Arjun is a non-resident for tax year 2026-27. A citizen leaving India during the year for employment abroad gets the stay threshold extended to 182 days, and his stay of 70 days falls short of it, so the 60-day test cannot make him resident.

  1. AHe is a resident, because he was in India for more than 60 days in the tax year
  2. BHe is a non-resident, because he left India for employment outside India and his stay in India is less than 182 daysCorrect
  3. CHe is a resident but not ordinarily resident, because he was in India for fewer than 182 days
  4. DHe is a non-resident only if his foreign income exceeds Rs 15 lakh

Explanation

An Indian citizen who leaves India in the tax year for employment outside India is resident only if he stays in India for 182 days or more. Here the stay is 70 days, so basic condition (a) fails and the 60/365 condition is not available to him as the 60-day period is extended to 182 days. He is therefore a non-resident. Option A wrongly applies the 60-day rule.

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