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

Mr Iyer, who was resident in India in the tax year in which he died, left an estate that earned income in later tax years. His only executor lives abroad and would herself be a non-resident on her own account. What is the residential status of the executor for assessing the estate's income?

The executor is treated as resident. The Act deems an executor to be resident or non-resident according to the deceased person's status for the tax year of death. Since Mr Iyer was resident that year, the executor's own presence abroad does not change the estate's status.

  1. ANon-resident, because the executor lives abroad
  2. BResident, because the executor is deemed resident or non-resident according to the deceased's status for the tax year of deathCorrect
  3. CDetermined afresh each year by the days the executor spends in India
  4. DNot ordinarily resident in every case, since the estate is of a deceased person

Explanation

Under section 312(2), the executor is deemed resident or non-resident according to the residential status of the deceased for the tax year in which death took place. Mr Iyer was resident in that year, so the executor is treated as resident when assessed on the estate's income. The executor's own personal status is irrelevant and is assessed separately under section 312(4).

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