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

Mr Vikram Rao, an Indian citizen, was in India for 70 days in the current tax year. He was in India for 400 days in total in the four preceding years. During the year he left India for employment outside India. Under the Income-tax Act, 2025, which of the following is correct about his residential status?

He is a non-resident. Under section 6(3), the 60-day and 365-day alternative test cannot be applied to a citizen who leaves India during the year for employment outside India, and his 70 days in India falls short of the 182-day test.

  1. AHe is resident, since 70 days is above 60 and 400 exceeds 365
  2. BHe is resident, since citizens are always resident
  3. CHe is non-resident, because the 60-day test does not apply to a citizen who leaves India for employment outside India, and he stayed under 182 daysCorrect
  4. DHe is non-resident only if his total income is below Rs. 15 lakh

Explanation

Section 6(3) states that section 6(2)(b) does not apply to a citizen who leaves India in the year for employment outside India. Only the 182-day test of 6(2)(a) remains, and his 70 days is below it. The first option applies the second test that is switched off, which is the key error.

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