2. RESIDENCE INDIVIDUAL
The word ‘non-resident’ has not been defined in the
Act. There are two requirements of section 6(1) which
defines residence of an individual in India :
(i) If an individual is in India in any
previous year for a period or periods amounting in all
to 182 days or more ; or
(ii) If the individual, having within the four
years preceding that year been in India for a period or
periods amounting in all to 365 days or more, is in
India for a period or periods amounting in all to 60
days or more in that year.
3. Exception to conditions
Period 60 Days is extended to 182 days in the
following cases.
i) An Indian citizen who leaves India during the
previous year for the purpose of
employment outside India
ii) Indian citizen who leaves India during the
previous year as a member of crew of
Indian ship.
iii) Indian citizen or person of Indian origin who
comes on a visit to India during the
previous year.
4. POINT TO BE CLEARED
Residential ship status is not to do
anything with citizenship status.
Resident ship is decided on the amount
of days he had stayed in the previous year .
5. WHAT IS NOT IMPORTANT
•PLACE OF STAY
•PURPOSE OF STAY
•CONTINUITY OF STAY
•STAY IS VOLUNTARY OR INVOLUNTARY
Non Resident is not liable to pay income tax on
foreign income .
6. EXAMPLES
• Chris Gayle, the West Indies cricketer comes to India for 100
days every year. Find out his residential status for the A.Y.
2009-10.
Solution :
For the purpose of his residential status in India for A.Y. 2009-10,
the relevant previous year is 2008-09.
• The total stay of Chris Gayle in the last 4 years preceding the
previous year is 400 days (i.e.100 4) and his stay in the
previous year is 100 days. Therefore, since he has satisfied the
second condition in section 6(1), he is a resident.
• Therefore, the residential status of Chris Gayle for the
assessment year 2009-10 is he is a resident
7. ISSUES IN THE CASE
Individual not leaving India for employment
but he is leaving India for purposes of
employment outside India.
An individual need not be an unemployed
person who leaves India for employment outside
India.
8. CASE 1
An Indian company deputed its employee ‘M’ to
UK for two years from 1-7-2005 . In financial year
2005-06, ‘M’ stayed in India for less than 182 days .
‘M’ would be considered as non-resident in India
for financial year 2005-06 or not
The salary received in India for rendering services
in UK would not be taxable in India .
9. ARGUMENT (Favor)
Commissioner said that as ‘M’s stayed only 88
days in India in the financial year 2005-06, the
status of ‘M’ is that of resident in India.
The applicant’s case is that since ‘M’ is a citizen
of India and left India for the purpose of
employment outside the State, he would be a non-
resident if his stay is less than 182 days in that year
‘M’ stayed in the year in question for only 88
days, he would be a non-resident.
10. CONCLUSION
M is not leaving India for employment but it is
leaving India for the purposes of employment outside
India.
An individual need not be an unemployed person
who leaves India for employment outside India.
The fact that ‘M’ was already an employee at the
time of leaving India is hardly material or relevant.
M is a Non Resident
Salary income received in India by ‘M’ from Indian
company for rendering services outside India is not
taxable in India.
11. CASE 2
1. Whether salary income received in India by Mr.
Manish and Gupta from British Gas India Private
Limited for rendering services outside India is
taxable in India ?
2. Whether British Gas India Private Limited is
required to withhold taxes on salary paid in India
to Mr. Manish Gupta for rendering services
outside India ?
12. CASE 2
Mr. Manish Gupta commenced employment with
the Indian company in February/March, 2002
From July 1, 2005 he was deputed to BG, U.K
since been working in U.K.
It is asserted that he would be spending less than
182 days in India in financial year 2005-06,
therefore, he is a non-resident.
13. ARGUMENT
The Commissioner stated that in view of the
stay of 88 days in India in the financial year
2005-06, the status of Mr. Gupta is that of
resident in India.
14. ARGUMENT (FAVOR)
Mr. Gupta is a citizen of India and left India
for the purpose of employment outside the
State, he would be a non-resident if his stay
is less than 182 days in that year and as Mr.
Gupta’s residence was only 88 days, he
would be a non-resident.
15. ARGUMENT (FAVOR)
Mr. Syali, learned counsel appearing for the applicant,
also showed a cause notice submitted that the stay of
Mr. Gupta in the financial year 2005-06 is 88 days and
according to section 6(1) of the Act, the period of 60
days in clause (c) has been substituted by 182 days as he
left India for the purpose of employment, he would be a
non-resident.
16. CONLUSION
As Mr. Gupta stay is less than 182 days (his stay
is 88 days in India), therefore, he becomes a non-
resident
He is already in employment and is leaving
India on deputation, he cannot be said to leave
India for employment.
He is not leaving India for employment but it is
leaving India for the purpose of employment
outside India.
we came the conclusion that Mr. Manish Gupta
is not a resident in India in the financial year 2005-
06.
