Residential Status Solution

Residential Status

RESIDENTIAL STATUS

Problem 1
During the previous year 2010-11, he was in India for 80 days & during 4 years immediately preceding the previous year, he was in India for 364 days as shown below:

Year	2006-07	2007-08	2008-09	2009-10	Total
No. of days stayed in India	130	75	59	100	364

Thus, he does not satisfy any of the conditions specified u/s 6(1) & consequently, he is a non-resident in India for the previous year 2010-11.

Problem 2
During the previous year 2010-11, he was in India for 242 days as shown below -

P.Y.	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Total
2010-11	15	31	30	31	31	30	31	30	13	-	-	-	242

He was in India for more than 182 days during the previous year hence, he satisfies sec. 6(1)(a). But he is not satisfying dual conditions specified in sec. 6(6) [as he came to India for first time]. Therefore, X is a resident but not ordinarily resident in India for the previous year 2010-11.
Note: In order to determine residential status, it is not necessary that a person should continuously stay in India at the same place.

Problem 3
During the previous year 2010-11, Ali was in India for 67 days calculated as under:

Month	January	February	March	Total
No. of days stayed in India	8	28	31	67

During the previous year 2010-11, he was in India for 67 days. He was also in India for more than 365 days during four years immediately preceding the previous year. Thus, he satisfies sec. 6(1)(c). However, his residential status depends on following cases -

Case 1) If the practical training is related to his employment then he falls under the exception (i.e. if an Indian citizen leaves India during previous year for employment purpose, then he will be treated as resident only if he resides in India for 182 days or more in the relevant previous year). Hence, he is non-resident in India.

Case 2) If the practical training is related to his education and not for employment then he is a resident and ordinarily resident [As he also satisfies both conditions of sec. 6(6)].

Problem 4
Number of days Mr. Backer stayed in India in past few years shall be as follows:

P.Y.	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Total
2010-11	-	-	-	-	-	-	22	30	31	31	28	31	173
2009-10	46												46
2008-09	30	31	1	-	-	-	-	-	-	-	-	-	62
2007-08 & Back	30	31	30	31	31	30	31	30	31	31	29 or 28	31	366 0r 365

During the previous year 2010-11, the assessee was present in India for 173 days and during four years immediately preceding the previous year 10-11, he was present in India for more than 365 days. Hence, he satisfies one of the basic conditions laid down in sec. 6(1). So he is resident in India for the previous year 2010-11. Further, he satisfies both the additional conditions of sec. 6(6), as shown below -

S.N.	Previous Year	Presence in India (In Days)	Resident (R) or Non resident (NR)	Condition satisfied to become a resident
1	2009-2010	46	NR	-
2	2008-2009	62	R	Sec.6(1)(c)
3	2007-2008	366	R	Both
4	2006-2007	365	R	Both
5	2005-2006	365	R	Both
6	2004-2005	365	R	Both
7	2003-2004	366	R	Both
8	2002-2003	365	R	Both
9	2001-2002	365	R	Both
10	2000-2001	365	R	Both

Since he is resident in India for 9 years out of 10 years immediately preceding the previous year (as shown in above working) as well as he resided in India for 1934 days out of 7 immediately preceding previous year, he satisfies both conditions of sec. 6(6). Therefore, he is a resident and ordinarily resident.
Conclusion: Resident and ordinarily resident.

Problem 5
X and Mrs. X resided in India for 7 months in the following manner -

P.Y.	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Total
2010-11	-	-	-	-	-	-	17	30	31	31	28	31	168
2011-12	30	14	-	-	-	-	-	-	-	-	-	-	44

Hence, during the previous year, both X and Mrs. X stayed in India for 168 days only.
As per explanation (b) to sec. 6(1), an Indian citizen or a person of Indian origin, who normally resides outside India, comes on a visit to India during the previous year shall have to reside in India for 182 days or more, to be a resident in India.
Since, Mr. X and Mrs. X were in India during the previous year 2010-11 for 168 days, therefore, both X and Mrs. X shall be non-resident in India for the previous year 2010-11.

Problem 6
Computation of gross total income of Daksh for the A.Y.2011-12:

Particulars	Resident & Ordinarily resident	Resident but not ordinarily resident	Non resident
Salary received in India for 3 months	9,000	9,000	9,000
Income from house property in India	13,470	13,470	13,470
Interest on saving bank deposit in SBI	1,000	1,000	1,000
Amount brought into India out of past untaxed profit	Nil	Nil	Nil
Income from agriculture in Indonesia	12,350	Nil	Nil
Income from business in Bangladesh, being controlled from India	10,150	10,150	Nil
Dividend received in Belgium from French company	23,000	Nil	Nil
Gross Total Income	68,970	33,620	23,470

Problem 7
During the relevant previous year, Mr. Rishi neither satisfies sec.6(1)(a) (i.e. not resided for 182 days in India) nor satisfies sec.6(1)(c) (i.e. not resided in India for 365 days or more during 4 years immediately preceding the previous year) , hence he is non resident.
Thus, computation of income of Rishi is as follow:

Particulars	Working	Amount
Salary	As neither earned nor received in India	Nil
Agricultural income	Exempt u/s 10(1)	Nil
Income from let out Indian house property	As reduced by standard deduction @ 30%	58,800
Dividend	Exempt u/s 10(34)	Nil
Total Income		58,800

Problem 8
Computation of income liable to tax in India of Santosh for the A.Y. 2011-12

Particulars	Resident & Ordinarily resident	Resident but not ordinarily resident	Non resident
Income from sale of house property situated in London
- 50% consideration received in India	7,50,000	7,50,000	7,50,000
- 50% consideration received outside India	7,50,000	Nil	Nil
Income from sale of house property situated in Jaipur
- 50% consideration received in India	35,000	35,000	35,000
- 50% consideration received outside India	35,000	35,000	35,000
Dividend received in India from a foreign company	5,000	5,000	5,000
Dividend received from a foreign company outside India	7,000	Nil	Nil
Royalty received from the Government of India	1,00,000	1,00,000	1,00,000
Rent being directly deposited in bank situated in Austria by tenant from a property in Austria, however assessee withdraw from Indian branch of such bank (Note)	50,000	Nil	Nil
Income received in Nepal being controlled from India	10,000	10,000	Nil
Income liable to tax in India	17,42,000	9,35,000	9,25,000

Note: Rent directly deposited in bank situated in Austria by tenant from a house property in Austria is received at Austria. Further, receipt of such money in India is mere remittance.

Problem 9
Computation of total income of Rajesh for the assessment year 2011-12

Particulars	Amount
Salaries
Salary for 3 months received in India (computed)	9,000
Income from house property
Income from house property in India (computed)	3,400
Profits and gains of business or profession
Income from business in Pakistan being controlled from India	Nil
Income from other sources
Dividend received in Germany from British company out of which Rs.3000 was remitted to India	Nil
Interest on saving bank deposits in State Bank of India	1,000
Amount brought to India out of past untaxed profit earned in Japan	Nil
Gross Total Income / Total Income	13,400