Residential status from days abroad, and gross total income of a resident and ordinarily resident (as set, 1961 Act, AY 2020-21)

Readings

1. Days in India. The question gives only the days he spent in the UK. A day not spent in the UK is taken as a day in India, so the days in India in a year are the days of that year less the UK days. 2015-16 and 2019-20 each contain a 29 February, so they have 366 days.
2. Earlier years. He never went abroad before 1st June 2015, so he was in India for the whole of every year up to 2014-15.
3. The 319 days of 2015-16. Only 305 days run from 1st June 2015 to 31st March 2016, so 319 UK days cannot all fall after 1st June. The figure is used as printed: 366 − 319 = 47 days in India in 2015-16. Nothing turns on it: on any figure from 0 to 59 days he is non-resident in that year (fewer than 60 days), and the status for 2019-20 comes out the same.
4. Visits abroad. He works in India for an Indian company and goes to the UK on its business; he does not leave India for employment outside India. So the 60-day rule of section 6(1)(c) applies in each year without the extension in Explanation 1(a) to section 6(1).

Days in India in each year

For 2017-18, the four preceding years (2013-14 to 2016-17) give 365 + 365 + 47 + 196 = 973 days, well above 365.

Residential status for the previous year 2019-20

1. Resident. He was in India for 291 days, which is 182 days or more (section 6(1)(a)).
2. Ordinarily resident. A resident individual is not ordinarily resident only if, in the ten previous years before, he was a non-resident in nine, or if in the seven previous years before he was in India for 729 days or less (section 6(6)(a)).
   • Of the ten years 2009-10 to 2018-19 he was non-resident in two only (2015-16 and 2018-19), and resident in the other eight (the six whole years 2009-10 to 2014-15, then 2016-17 and 2017-18).
   • In the seven years 2012-13 to 2018-19 he was in India for 365 + 365 + 365 + 47 + 196 + 94 + 50 = 1,482 days, well above 729.
   • Neither condition is met.

So Mr. X is resident and ordinarily resident in India for the previous year 2019-20 (assessment year 2020-21), and his income from every source, in India or outside, is part of his total income (section 5(1)).

Treatment of each item

1. Salary from ABC Ltd., received outside India: taxable; for a resident and ordinarily resident person the place of receipt does not matter (section 5(1)). Taken as given, after the standard deduction: ₹24,00,000.
2. Income from the house in London: taxable in full, whether or not remitted (section 5(1)(c)): ₹8,00,000.
3. Untaxed past profits brought into India: not income of the previous year. Bringing earlier profits into India is only a transfer of money already earned; it is not receipt of income (section 5 charges income of the year). Nil.
4. Dividend from an Indian company, received outside India: dividends from a domestic company are exempt (section 10(34)), but not the part charged under section 115BBDA. That section charges a resident individual at 10% on dividends from domestic companies above ₹10,00,000 in the year. So ₹3,00,000 (₹13,00,000 − ₹10,00,000) is included, to be taxed at 10%, and ₹10,00,000 is exempt.
5. Gift of money from a friend in the UK: a friend is not a relative, and a sum of money received without consideration above ₹50,000 in the year is income from other sources in full (section 56(2)(x)(a)): ₹4,00,000.
6. Interest on the UK development bonds: taxable in full, including the part kept outside India (section 5(1)(c)): ₹4,00,000.
7. Capital gain on the property in Pune: the property is in India, so the gain accrues in India whatever the place of payment (section 5(1)(b)): ₹12,00,000. The question does not say whether it is long-term or short-term; it enters gross total income either way.

Gross total income