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

Vikram, an Indian citizen, works in Singapore, where he is liable to tax. In the current tax year he is in India for 130 days. His total income other than foreign-source income is Rs. 18 lakh. He was in India for 500 days in the four preceding years. He was resident in all of the ten preceding tax years and was in India for 2,000 days in the seven preceding tax years. Under the Income-tax Act, 2025, what is his status?

Vikram is resident but not ordinarily resident. His non-foreign income exceeds Rs. 15 lakh, so the 120-day test applies, and his 130-day stay with 500 days in the four preceding years makes him resident. Being a citizen in that 120 to 181 day band, he is classified as not ordinarily resident.

  1. ANon-resident, because the stay is under 182 days
  2. BResident and ordinarily resident, because both conditions for not ordinarily resident are unmet
  3. CResident and ordinarily resident, because he has been resident in all ten preceding years
  4. DResident but not ordinarily resident, because he stayed 120 days or more but fewer than 182 and his non-foreign income exceeds Rs. 15 lakhCorrect

Explanation

Because his non-foreign income exceeds Rs. 15 lakh, the 120-day condition applies in place of 60 days. He stayed 130 days and has 500 days in the four preceding years (365 or more), so he is resident under section 6(2)(b) read with 6(5). Section 6(13)(b) then makes him not ordinarily resident, as he is a citizen with income above Rs. 15 lakh who stayed 120 days or more but fewer than 182. Option B ignores that clause.

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