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

Mr Vikram, a citizen of India, is resident in India under section 6(2) for the tax year. His total income for the year, excluding income from foreign sources, is Rs. 9 lakh. He has been a non-resident in only six of the ten preceding tax years, and he was in India for 900 days in the seven preceding tax years. His residential status is:

Vikram is resident and ordinarily resident. He fails both not-ordinarily-resident tests: he was non-resident in only six of ten years, and he stayed 900 days, above 729, in the seven preceding years. His income is also below Rs. 15 lakh, so no other exception applies.

  1. AResident and ordinarily residentCorrect
  2. BResident but not ordinarily resident
  3. CNon-resident
  4. DDeemed resident under section 6(7)

Explanation

Not ordinarily resident status needs either non-residence in 9 of the 10 preceding years or presence of 729 days or less in the 7 preceding years. Vikram was non-resident in 6 of 10 years, and 900 days exceeds 729. His income is below Rs. 15 lakh, so the clause (b) route does not apply either. He is therefore resident and ordinarily resident.

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