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

Mr Deepak, a citizen of India, left India on 1 July of the tax year for employment in Singapore and was in India for 91 days in that year. He was in India for 800 days in the four preceding years. His non-foreign income is Rs. 20 lakh, he is taxed in Singapore, and he was a resident in all 10 preceding tax years. Which statement is correct for the tax year?

Deepak is non-resident. Because he left India for employment abroad, the 60-day and 365-day alternative condition cannot apply to him, and 91 days is below 182. He is taxed in Singapore, so deemed residence under section 6(7) also fails.

  1. AHe is resident and ordinarily resident under section 6(2)(b)
  2. BHe is resident but not ordinarily resident because his income exceeds Rs. 15 lakh
  3. CHe is non-resident, as section 6(2)(b) is not available to him and his stay is below 182 daysCorrect
  4. DHe is deemed resident under section 6(7)

Explanation

He left India for employment outside India, so section 6(3) excludes the 60-day and 365-day test. His 91 days are below 182, so section 6(2)(a) fails. Section 6(7) fails because he is liable to tax in Singapore. The Rs. 15 lakh rule in 6(13)(b) only classifies someone already resident, so he is non-resident.

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