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CMA Final · Direct Tax Laws and International Taxation · Assessment of Individuals including Non-residents

Mr Arvind Menon, an Indian citizen, works in Singapore and is not liable to tax there or in any other country by reason of domicile or residence. During the tax year his only Indian-source income is rent of Rs. 18,00,000, and he stays in India for 40 days. What is his residential status for the tax year under the Income-tax Act, 2025?

He is resident but not ordinarily resident. As an Indian citizen not taxable anywhere else by reason of domicile or residence, with Indian-source income above Rs. 15 lakh, he is deemed resident under section 6(7), and such a deemed resident citizen is classified as not ordinarily resident.

  1. ANon-resident, because he stayed in India for fewer than 60 days
  2. BResident but not ordinarily resident, because he is deemed resident under the citizenship-based provisionCorrect
  3. CResident and ordinarily resident, because his Indian income exceeds Rs. 15 lakh
  4. DNon-resident, because he left India for employment abroad

Explanation

Mr Menon is a citizen, is not liable to tax in any other country by reason of domicile or residence, and has total income (excluding foreign-source income) above Rs. 15 lakh. He is therefore deemed resident under section 6(7). A citizen deemed resident under sub-section (7) is treated as not ordinarily resident under section 6(13)(c), so he is resident but not ordinarily resident. The ROR option wrongly ignores section 6(13)(c).

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