Page 39 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes If the individual satisfies both the conditions mentioned above, he is a resident and
ordinarily resident but if only one or none of the conditions are satisfied, the individual is
a resident but not ordinarily resident.

Example: Steve Waugh, the Australian cricketer comes to India for 100 days every year.
Find out his residential status for the A.Y. 2013–14.
Solution: For the purpose of his residential status in India for A.Y. 2013–14, the relevant previous
year is 2012–13.
Step 1: The total stay of Steve Waugh 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.
Step 2: Since his total stay in India in the last 7 years preceding the previous year is 700 days
(i.e. 100 × 7), he does not satisfy the minimum requirement of 730 days in 7 years. Any one of the
conditions not being satisfied, the individual is resident but not ordinarily resident.
Therefore, the residential status of Steve Waugh for the assessment year 2013–14 is resident but
not ordinarily resident.

Example: Mr. B, a Canadian citizen, comes to India for the first time during the P. Y.
2008–09. During the financial years 2008–09, 2009–10, 2010–11, 2011–12 and 2012–13 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.2013–14.
Solution: During the previous year 2012–13, Mr. B was in India for 70 days and during the 4 years
preceding the previous year 2012–13, he was in India for 355 days (i.e. 55+ 60+ 90+ 150 days).
Thus, he does not satisfy section 6(1). Therefore, he is a non-resident for the previous year
2012–13.

Example: Mr. C, a Japanese citizen left India after a stay of 10 years on 1.06.2010. During
the financial year 2011–12, he comes to India for 46 days. Later, he returns to India for 1 year on
10.10.2012. Determine his residential status for the A. Y. 2013–14.
Solution: During the previous year 2012–13, Mr. C was in India for 173 days (i.e. 22 + 30 + 31+ 31+
28 + 31 days). His stay in the last 4 years is:
2011–12 - 46
2010–11 - 62 (i.e. 30 + 31 + 1)
2009–10 - 365 (since he left India on 1.6.2010 after 10 years)
2008–09 - 365 (since he left India on 1.6.2010 after 10 years)
The total number of days comes as 838. Thus Mr. C is a resident since his stay in the previous year
2012–13 is 173 days and in the last 4 years is more than 365 days. For the purpose of being
ordinarily resident, it is evident from the above calculations, that his stay in the last 7 years is
more than 730 days and since he was in India for 10 years prior to 1.6.2010, he was a resident in
at least 2 out of the last 10 years preceding the relevant previous year.
Therefore, Mr. C is a resident and ordinarily resident for the A.Y. 2013–14.

Example: Mr. D, an Indian citizen, leaves India on 22.9.2012 for the first time, to work as
an officer of a company in France. Determine his residential status for the A.Y. 2013–14.

34 LOVELY PROFESSIONAL UNIVERSITY