Question 1 OR (b)
Residential status of a person of Indian origin (as set, 1961 Act, AY 2016-17)
5 marks
- Time to write
- About 10 minutes
From an older CBCS paper
Question
Question 1 OR (b) · 5 marksMr. X, a citizen of Australia, had a maternal grandfather who was born in a village near Lahore in 1932. On April 7, 2015 he came to India to complete a foreign assignment given by his employer company, and he goes back on October 4, 2015. For the previous year 2015-16, Mrs. X is ROR in India. Before April 7, 2015, his stay in India was as follows:
| Previous year | Number of days on which Mr. X was in India |
|---|---|
| PY 2014-15 | 179 |
| PY 2013-14 | 182 |
| PY 2012-13 | 180 |
| PY 2011-12 | 72 |
| PY 2010-11 | 175 |
| PY 2009-10 and before | Nil |
Find out his residential status for the assessment year 2016-17.
Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2016-17 (previous year 2015-16), with the dates as printed. Marks printed: 5. "Mrs. X is ROR in India" stands as printed (the person is "Mr. X" everywhere else; the Hindi twin also says Mrs. X). ROR is not explained in the question. The stay of Mr. X in India in the previous year 2015-16 is from April 7, 2015 to October 4, 2015, as printed. The table has no printed rules. The year cells carry "PY" (previous year) only so that the table does not repeat the paper's wording; the years and days are as printed.
Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- Find outFormula first, then the working, then the answer with its unit (₹, %, units).
Write it in this order
- Read the data; note exactly what is asked 1 min
- 1 Person of Indian origin and the visit exception 1½ marks 2 min
- 2 Days in India in 2015-16 1 mark 1 min
- 3 Basic conditions and conclusion 2 marks 3 min
- 4 The other reading ½ mark 2 min
- Check: arithmetic, units (₹, %), final answer underlined 1 min
Try it first. About 10 minutes for 5 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Is Mr. X a person of Indian origin?
Under the Explanation to section 115C(e), which Explanation 1(b) to section 6(1) adopts, a person is of Indian origin if he, either parent or any grandparent was born in undivided India. Mr. X's maternal grandfather was born near Lahore in 1932, which was then part of undivided India. So Mr. X, though a citizen of Australia, is a person of Indian origin.
He lives outside India and came to India to complete an assignment given by his foreign employer, returning when it was done. That is taken as a visit to India: the main reading below. (The status of Mrs. X, printed as ROR, does not affect his own status, which section 6 tests person by person.)
Days in India in the previous year 2015-16
Both the day of arrival and the day of departure are counted.
| Month | Days in India |
|---|---|
| April 2015 (7th to 30th) | 24 |
| May 2015 | 31 |
| June 2015 | 30 |
| July 2015 | 31 |
| August 2015 | 31 |
| September 2015 | 30 |
| October 2015 (1st to 4th) | 4 |
| Total | 181 |
Basic conditions of section 6(1)
| Condition | Mr. X | Met? |
|---|---|---|
| Section 6(1)(a): 182 days or more in the year | 181 days | No |
| Section 6(1)(c): 365 days or more in the four preceding years (179 + 182 + 180 + 72 = 613) and, in the year, 182 days or more (the 60 days are replaced by 182 for a person of Indian origin on a visit: Explanation 1(b) to section 6(1)) | 613 days; 181 days in the year | No |
Residential status for assessment year 2016-17
Mr. X meets neither condition of section 6(1), so he is a non-resident for the previous year 2015-16 (assessment year 2016-17). The tests of section 6(6) for ordinary residence arise only for a resident, so they are not needed.
If coming for his employer's assignment were held not to be a visit, the 60-day test of section 6(1)(c) would apply: 181 days in the year and 613 days in the four preceding years make him resident. His ordinary residence then turns on a fact the question does not give: whether his stay in 2014-15 (179 days) was itself a visit.
- The 2014-15 stay not a visit either: 179 days in that year and 609 days in its four preceding years make him resident for 2014-15 under the 60-day test, and he was resident in 2013-14 (182 days, section 6(1)(a)); every other earlier year fails both tests. He was then a non-resident in 8 (not 9) of the 10 preceding years, and in India for 788 days (more than 729) in the 7 preceding years; neither limb of section 6(6)(a) is met, and he would be resident and ordinarily resident.
- The 2014-15 stay a visit: the 182-day test applies to that year, and 179 days falls short, so 2013-14 is his only resident year. He was then a non-resident in 9 of the 10 preceding years, which meets the first limb of section 6(6)(a), and he would be resident but not ordinarily resident.
Where the 5 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Person of Indian origin and the visit exception | 1.5 |
| 2 | Days in India in 2015-16 | 1 |
| 3 | Basic conditions and conclusion | 2 |
| 4 | The other reading | 0.5 |
| Total | 5 |
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