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CA/CMA – Inter M23
Residence And Scope Of Total Income
Question 1: Mr. Anand is an Indian citizen and a member of the crew of a Singapore
bound Indian ship engaged in carriage of passengers in international traffic departing
from Chennai port on 6th June, 2023. From the following details for the P.Y. 2023-24,
determine the residential status of Mr. Anand for
A. Y. 2024-25, assuming that his stay in India in the last 4 previous years (preceding
P.Y. 2023-24) is 400 days:
Particulars Date
Date entered into the Continuous Discharge Certificate in respect of 6th June,
joining the ship by Mr. Anand 2023
Date entered into the Continuous Discharge Certificate in respect of 9th
signing off the ship by Mr. Anand December,
2023
Solution :
In this case, since Mr. Anand is an Indian citizen and leaving India during P.Y. 2023-24
as a member of the crew of the Indian ship, he would be resident in India if he stayed in
India for 182 days or more.
The voyage is undertaken by an Indian ship engaged in the carriage of passengers in
international traffic, originating from a port in India (i.e., the Chennai port) and having
its destination at a port outside India (i.e., the Singapore port). Hence, the voyage is an
eligible voyage for the purposes of section 6(1).
Therefore, the period commencing from 6th June, 2023 and ending on 9th December,
2023, being the dates entered into the Continuous Discharge Certificate in respect of
joining the ship and signing off from the ship by Mr. Anand, an Indian citizen who is a
member of the crew of the ship, has to be excluded for computing the period of his stay
in India. Accordingly, 187 days [25+31+31+30+31+30+9] have to be excluded from the
period of his stay in India. Consequently, Mr. Anand's period of stay in India during the
P.Y. 2023-24 would be 179 days [i.e., 366 days - 187 days]. Since his period of stay in
India during the P.Y. 2023-24 is less than 182 days, he is a non-resident for A.Y. 2024-
25.
Question 2: Brett Lee, an Australian cricket player visits India for 100 days in every
financial year. This has been his practice for the past 10 financial years.
(a) Find out his residential status for the assessment year 2024-25.
(b) Would your answer change if the above facts relate to Srinath, an Indian citizen who
resides in Australia and represents the Australian cricket team?
(c)What would be your answer if Srinath had visited India for 120 days instead of 100
days every year, including P.Y.2023-24?
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Solution :
(a) Determination of Residential Status of Mr. Brett Lee for the A. Y. 2024-25:-
Period of stay during previous year 2023-24 = 100 days
Calculation of period of stay during 4 preceding PYs (100 × 4 = 400 days)
2022-23 100 days
2021-22 100 days
2020-21 100 days
2019-20 100 days
Total 400 days
Mr. Brett Lee has been in India for a period more than 60 days during previous year
2023-24 and for a period of more than 365 days during the 4 immediately preceding
previous years. Therefore, since he satisfies one of the basic conditions under section
6(1), he is a resident for the A.Y. 2024-25.
Computation of period of stay during 7 preceding previous years = 100 x7
= 700 days
2022-23 100 days
2021-22 100 days
2020-21 100 days
2019-20 100 days
2018-19 100 days
2017-18 100 days
2016-17 100 days
Total 700 days
Since his period of stay in India during the past 7 previous years is less than 730 days,
he is a not-ordinarily resident during the A.Y. 2024-25 (See Note below).
Therefore, Mr. Brett Lee is a resident but not ordinarily resident during the previous year
2023-24 relevant to the assessment year 2024-25.
Note: An individual, not being an Indian citizen, would be not-ordinarily resident person
if he satisfies any one of the conditions specified under section 6(6), i.e,
(i) If such individual has been non-resident in India in any 9 out of the 10 previous years
preceding the relevant previous year, or
(ii) If such individual has during the 7 previous years preceding the relevant previous
year been in India for a period of 729 days or less.
In this case, since Mr. Brett Lee satisfies condition (ii), he is a not-ordinarily resident
for the A. Y. 2024-25.
(b) If the above facts relate to Mr. Srinath, an Indian citizen, who residing in Australia,
comes on a visit to India, he would be treated as non-resident in India, irrespective of
his total income (excluding income from foreign sources), since his stay in India in the
current financial year is, in any case, less than 120 days.
(c) In this case, if Srinath's total income (excluding income from foreign sources) exceeds
Rs.15 lakh, he would be treated as resident but not ordinarily resident in India for
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P.Y.2023-24, since his stay in India is 120 days in the P.Y.2023-24 and 480 days (i.e.,
120 days × 4 years) in the immediately four preceding previous years.
If his total income (excluding income from foreign sources) does not exceed Rs.15 lakh,
he would be treated as non-resident in India for the P.Y.2023-24, since his stay in India
is less than 182 days in the P. Y.2023-24.
Question 3: Mr. B, a Canadian citizen, comes to India for the first time during the P.Y.
2019-20. During the financial years 2019-20, 2020-21 2021-22, 2022-23 and 2023-24,
he was in India for 55 days, 60 days, 90 days, 150 days and 70 days, respectively.
Determine his residential status for the A.Y. 2024-25.
Solution :
During the P.Y. 2023-24, Mr. B was in India for 70 days and during the 4 years
preceding the P.Y. 2023-24, he was in India for 355 days (ie. 55 + 60+ 90+ 150 days).
Thus, he does not satisfy the basic condition under section 6(1). Therefore, he is a non-
resident for the P.Y. 2023-24.
Question 4: Mr. Ram, an Indian citizen, left India on 22.09.2023 for the first time to
work as an officer of a company in Germany. Determine the residential status of Ram
to oil for the A.Y. 2024-25.
Solution :
Under section 6(1), an individual is said to be resident in India in any previous year if he
satisfies any one of the following conditions -
(i) He has been in India during the previous year for a total period of 182 days or more,
or
(ii) He has been in India during the 4 years immediately preceding the previous year for a
total period of 365 days or more and has been in India for at least 60 days in the
previous year.
In the case of Indian citizens leaving India for employment, the period of stay during the
previous year must be 182 days instead of 60 days given in (ii) above.
During the previous year 2023-24, Mr. Ram, an Indian citizen, was in India for 175 days
only (i.e., 30+31+30+31+31+22 days). Thereafter, he left India for employment purposes.
Since he does not satisfy the minimum criteria of 182 days stay in India during the
relevant previous year, he is a non-resident for the A.Y. 2024-25.
Question 5: Mr. Dey, residing in US since 1990, visits India for 30 days every year. He
came back to India on 1.4.2022 for permanent settlement. What will be his
nor residential status for A. Y. 2024-25?
Solution :
Mr. Dey is a resident in A.Y. 2024-25 since he has stayed in India for a period of 366
days (more than 182 days) during the P.Y. 2023-24.
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As per section 6(6), a person will be "Not ordinarily Resident" in India in any previous
year, if such person, inter alia,:
(a) Has been a non-resident in 9 out of 10 previous years preceding the relevant previous
year; or
(b) Has during the 7 previous years immediately preceding the relevant previous year
been in India for 729 days or less.
If he does not satisfy either of these conditions, he would be a resident and ordinarily
resident.
For the previous year 2023-24 (A.Y. 2024-25), his status would be "Resident but not
ordinarily resident" since he was non-resident in 9 out of 10 previous years immediately
preceding the P.Y. 2023-24. He was resident only in the P.Y. 2022-23. Prior to that, he
was non-resident in all the years since his stay in India was only for 30 days each year.
He can be resident but not ordinarily resident also due to the fact that he has stayed in
India only for 545 days [365 days in P.Y. 2022-23 + (30 days x 6 years)] in 7 previous
years immediately preceding the P.Y. 2023-24, which is less than 730 days.
Question 6: Sam came to India first time during the P.Y. 2022-23. During the previous
year, he stayed in India for (i) 50 days; (ii) 183 days; & (iii) 153 days. Determine his
residential status for the A.Y. 2023-24.
Solution:
Basics of Income Tax Act
(i) Since Sam resides in India only for 50 days during the P.Y. 2022-23, he does not
satisfy any of the conditions specified in sec. 6(1). He is, therefore, a non-resident in
India for the P.Y. 2022-23.
(ii) Since Sam resides in India for 183 days during the previous year 2022-23, he satisfies
one of the conditions specified in sec. 6(1). He is, therefore, a resident in India for the
P.Y. 2022-23.
(iii) Sam resides in India only for 153 days during the previous year 2022-23. Though he
resided for more than 60 days during the previous year but in 4 years immediately
preceding the previous year (as he came India first time), he did not reside in India.
Hence, he does not satisfy any of the conditions specified in sec. 6(1). Thus, he is a
non-resident for the P.Y. 2022-23.
Question 7: Andy, a British national, comes to India for the first time during 2018-19.
During the financial years 2018-19,
2019-20, 2020-21, 2021-22 and 2022-23, he was in India for 55 days, 60 days, 80 days,
160 days and 70 days respectively. Determine his residential status for the assessment
year 2023-24
Solution:
During the previous year 2022-23, Andy was in India for 70 days & during 4 years
immediately preceding the previous year, he was in India for 355 days as shown below:
Year 2018-19 2019-20 2020-21 2021-22 Total
No. of days stayed in India 55 60 80 160 355
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Thus, he does not satisfy Sec.6(1) & consequently, he is a non-resident in India for the
P.Y. 2022-23.
Question 8:
Miss Pal, an Indian citizen, left India for first time on I" April, 2022 for joining job in
Tokyo. She came to India on 11th Jan, 2023 for only 170 days. Determine her residential
status for P.Y. 2022-23.
Solution:
Number of days Miss Pal stayed in India can be calculated as under:
P.Y. Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Total
22-23 1 - - - - - - - - 21 28 31 81
23-24 30 31 29 - - - - - - - - - 90
Since she left India for employment purpose, hence for becoming resident she has to stay
in India for at least 182 days. However, she is in India for only 81 days during the
previous year, thus she is a non-resident for the P.Y. 2022-23.
Question 9: Mr. X, aged 19 years, left India for first time on May 31, 2022. Determine
his residential status for the previous year 2022-23 if:
(i) He left India for employment purpose
(ii) He left India on world tour.
Solution:
During the previous year 2022-23, Mr. X was in India for 61 days as shown below
P.Y. Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Total
22-23 30 31 - - - - - - - - - - 61
During the previous year 2022-23, X stayed in India for 61 days. Further, he was in
India for more than 365 days during 4 years immediately preceding the relevant previous
year (as he left India for first time).
(i) Since he left India for employment purpose, condition of sec. 6(1)(c) shall not be
applicable on such assessee. He will be treated as resident in India, if and only if. he
resided in India for at least 182 days during the previous year. Hence, Mr. X is a non-
resident in India for the previous year 2022-23.
(ii) Since he left India on world tour, which is not an exception of sec. 6(1), satisfaction of
any one condition of sec. 6(1) makes him resident in India for the previous year 2022-23.
As he satisfies 2nd condition of sec. 6(1) [shown above], he is resident in India. Further,
he also satisfies dual conditions specified u/s 6(6) (since he left India for first time.
Therefore, he is an ordinarily resident for the previous year 2022-23.
Question 10:
X came India for first time on July 24, 2018. From July 24, 2018 to December 25, 2019,
he was in India. Again, he came to India on August 5, 2022 for employment purpose &
left India on November 25, 2022 permanently.
Determine his residential status for the previous year 2022-23 assuming -
(a) He is a foreign citizen
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(b) He is an Indian citizen
Solution:
During the previous year 2022-23, X was in India for 113 days as shown below:
P.Y. Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Total
22-23 - - - - 27 30 31 25 - - - - 113
Further, he was in India for more than 365 days during 4 years immediately preceding
the previous year as shown below:
P.Y. Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Total
18-19 - - - 8 31 30 31 30 31 31 28 31 251
19-20 30 31 30 31 31 30 31 30 25 - - - 269
20-21 - - - - - - - - - - - - -
21-22 - - - - - - - - - - - - -
As he satisfies condition given in sec. 6(1)(c), he is a resident in India.
Further, he was resident during 2 out of 10 years immediately preceding the relevant
previous year but he was in India only for 520 days in 7 years immediately preceding the
relevant previous year. As he is not satisfying dual conditions of sec. 6(6), he is a resident
but not ordinarily resident in India for the previous year 2022-23.
Note: His status shall remain same in both the cases as-
(a) Foreign citizens are not covered by 'exceptions to sec. 6(1)(c)'.
(b) Coming in India for employment purpose is not covered by 'exceptions to sec. 6(1)(c)*.
Question 11:
X, a foreign citizen, resides in India during the previous year 2022-23 for 83 days.
Determine his residential status for previous year 2022-23 assuming his stay in India
during the last few previous years are as follows-
Year Days Year Days Year Days Year Days
2007-08 220 2011-12 36 2015-16 137 2019-20 175
2008-09 15 2012-13 115 2016-17 265 2020-21 15
2009-10 257 2013-14 123 2017-18 310 2021-22 67
2010-11 110 2014-15 65 2018-19 121
Solution:
During previous year 2022-23, X was in India for 83 days & during 4 years immediately
preceding the previous year, he was in India for 378 days as shown below:
Year 2018-19 2019-20 2020-21 2021-22 Total
No. of days stayed in India 121 175 15 67 378
Thus, he satisfies one of the conditions specified w/s 6(1) & consequently, he becomes
resident in India in the P.Y.
2022-23. Further, to determine whether X is an ordinarily resident or not, he needs to
satisfy both conditions laid down u/s 6(6).
Presence in India (in Resident or Non Condition satisfied
Year
days) resident to become a resident
2021-2022 67 Resident 6(1)(c)
2020-2021 15 Non Resident None
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2019-2020 175 Resident 6(1)(c)
2018-2019 121 Resident 6(1)(c)
2017-2018 310 Resident Both
2016-2017 265 Resident Both
2015-2016 137 Non Resident None
2014-2015 65 Resident 6(1)(c)
2013-2014 123 Resident 6(1)(c)
2012-2013 115 Resident 6(1)(c)
Condition (i) of sec. 6(6) requires that an individual should be resident in India for at
least 2 out of 10 years preceding the relevant previous year. X was resident in India for 8
out of 10 years immediately preceding the previous year. Thus, he satisfies this
condition.
Condition (in) of sec. 6(6) requires that an individual should be present in India for at
least 730 days during 7 years preceding to relevant previous year. X was in India for
1090 days during 2015-16 to 2021-22. Hence, he satisfies this condition also.
X satisfies condition (fi) of sec. (1) as well as both the conditions of sec. 6(6). Thus, he is a
resident and ordinarily resident in India for the previous year 2022-23.
Question 12:
1. Mr. X, a foreign citizen, came in India for the first time on July 24, 2018. From July
24, 2018 to December 25, 2019 he was in India. Again, he came to India on August
5, 2022 for employment purpose and left India on November 25, 2022 permanently.
Determine his residential status for the assessment year 2023-24.
2. Determine the residential status of the following person for the assessment year
2023-24:
Mr. Balm came to India from England on 30th June, 2016 and after staying for three
years in India he went Germany on 1st July 2019. On Ist April, 2020, he again came
back to India and stayed in India upto 31st July, 2021. On Ist August, 2021, he went
to Denmark at a monthly salary of ' 8,00,000. He transferred to India on Ist January,
2023 and joined Delhi office of the same organization and started staying in India
since then.
3. Brown, a citizen of Bahama, came to India for the first time on 10th August, 2017 and
stayed up to 5th March, 2018. Subsequently, he stayed in India during 2018-19, 19-
20, 20-21, 21-22 and 22-23 for 120 days, 110 days, 100 days, 85 days and 62 days
respectively. Determine his residential status for the A. Y. 2023-24
Hints:
1. Resident but not ordinarily resident;
2. Resident and ordinarily resident;
3. Resident but not ordinarily resident
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