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CS Executive · Tax Laws and Practice · Basic Concept of Income Tax

Under the Income-tax Act, 2025, Arjun, an Indian citizen, is in India for 100 days in a tax year. He is not liable to tax in any other country because of domicile or residence. His total income other than foreign-source income is Rs 20 lakh. How is he treated for that year?

Arjun is resident but not ordinarily resident. He is a citizen with no tax liability elsewhere and income other than foreign-source income above Rs 15 lakh, so section 6(7) deems him resident. Section 6(13)(c) then classifies such a deemed resident as not ordinarily resident.

  1. AResident and ordinarily resident, because he is a citizen
  2. BNon-resident, because he stayed less than 182 days
  3. CResident but not ordinarily resident, because he is deemed resident under section 6(7)Correct
  4. DResident but not ordinarily resident, because he stayed 120 days or more

Explanation

Under section 6(7), a citizen is deemed resident if he is not liable to tax in any other country and his total income other than foreign-source income exceeds Rs 15 lakh. Arjun meets both conditions, so he is resident. Under section 6(13)(c), a citizen deemed resident under section 6(7) is not ordinarily resident. He is therefore resident but not ordinarily resident. The 120-day test in the last option does not apply as he stayed 100 days.

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