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

Vikram is an Indian citizen. In the current tax year he was in India for 130 days and his total income excluding income from foreign sources was Rs. 18 lakh. In the four preceding tax years he was in India for 400 days in total. He had been resident in India in 6 of the last 10 preceding tax years and had been in India for 1,500 days in the seven preceding tax years. He came to India on a visit from outside India. What is his residential status?

Vikram is resident but not ordinarily resident. His Indian income exceeds Rs. 15 lakh, so the 120-day limit applies. He meets it with 130 days plus 400 days in the preceding four years. Because his stay is between 120 and 182 days, he falls in the not ordinarily resident category.

  1. ANon-resident
  2. BResident and ordinarily resident
  3. CResident but not ordinarily residentCorrect
  4. DNot resident because he stayed less than 182 days

Explanation

He is a citizen visiting India with Indian income above Rs. 15 lakh, so section 6(5) replaces 60 days with 120 days. He stayed 130 days (at least 120) and had 400 days (at least 365) in the four preceding years, so he is resident. Under section 6(13)(b), a citizen with such income who stayed 120 days or more but less than 182 days is not ordinarily resident. So he is resident but not ordinarily resident. Calling him non-resident ignores the 120-day rule.

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