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

Mr. Arvind Nair, an Indian citizen, has lived in Dubai for many years. In tax year 2026-27 he visited India for only 70 days, and his total income from Indian sources was Rs 9 lakh. He is not an Indian citizen or person of Indian origin employed abroad on a ship, and his stay in each of the preceding four years was short. Which statement about his residential status for tax year 2026-27 is correct?

Arvind is a non-resident. Residential status under the Income-tax Act turns on days of stay in India, not citizenship. He stayed only 70 days and his earlier four-year stay was short, so neither the 182-day test nor the 60-plus-365-day test is satisfied.

  1. AHe is a resident because he is an Indian citizen
  2. BHe is a non-resident because he does not meet either basic conditionCorrect
  3. CHe is resident but not ordinarily resident because his stay is below 182 days
  4. DHe is a resident because his Indian income exceeds Rs 15 lakh

Explanation

Residence depends on stay, not citizenship. A stay of 182 days or more in the year, or 60 days in the year plus 365 days in the four preceding years, is needed. With 70 days in the year and short stays earlier, the 365-day test fails, so neither basic condition is met and he is a non-resident. Citizenship alone does not make a person resident.

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