Question 1 (a)
Residential status of a foreign national (as set, 1961 Act, AY 2017-18)
5 marks
- Time to write
- About 10 minutes
From an older CBCS paper
Question
Question 1 (a) · 5 marksMr. A is a British national who comes to India for the first time in 2012-13. In each of the financial years 2012-13; 2013-14; 2014-15; 2015-16 as well as 2016-17 his stay in India is 55 days, 60 days, 80 days, 160 days and 70 days in that order. Find his residential status for the assessment year 2017-18. 5
Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2017-18 (previous year 2016-17), with the dates as printed. The stay in India is given for the five years 2012-13 to 2016-17 only; the paper says 2012-13 is his first visit to India, so no stay in earlier years is stated. The answer records how it takes this; the note does not settle it.
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
- FindFormula 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 The two tests of section 6(1) for an individual 2 marks 3 min
- 2 Days in the previous year and in the four preceding years 2 marks 3 min
- 3 Conclusion: non-resident for assessment year 2017-18 1 mark 2 min
- Check: arithmetic, units (₹, %), final answer underlined 1 min
Short on time? End with step 3's one-line conclusion, whatever happens: never leave the figures without it.
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.
The paper says Mr. A came to India for the first time in 2012-13, so he has no stay in India before that year. The relevant previous year for assessment year 2017-18 is 2016-17. Being a British national, he is not a citizen of India. Nationality alone does not show whether he is a person of Indian origin (that turns on where he, a parent or a grandparent was born, under the Explanation to section 115C(e) that Explanation 1(b) to section 6(1) adopts, and the question does not say); he is taken not to be one. Nothing turns on it: if he were a person of Indian origin on a visit, Explanation 1(b) to section 6(1) would replace the 60 days of test (c) by 182, which his 70 days fail as well, so he would be a non-resident either way.
An individual is resident in India in a previous year if he meets either of two tests (section 6(1)):
- Test (a): he is in India for 182 days or more in that year (section 6(1)(a)); or
- Test (c): he is in India for 60 days or more in that year, and he was in India for 365 days or more in all during the four years before that year (section 6(1)(c)).
If he meets neither, he is a non-resident for that year. Whether a resident is also ordinarily resident (section 6(6)) needs to be asked only if one of the tests is met.
| Previous year | Stay in India (days) |
|---|---|
| 2012-13 | 55 |
| 2013-14 | 60 |
| 2014-15 | 80 |
| 2015-16 | 160 |
| Four years before 2016-17 | 355 |
| 2016-17 (the relevant previous year) | 70 |
- Test (a): 70 days in 2016-17 is less than 182 days. Not met.
- Test (c): the stay in 2016-17 (70 days) is 60 days or more, but the stay in the four preceding years is 355 days, which is less than 365 days. Not met.
Residential status for assessment year 2017-18
Mr. A meets neither test of section 6(1), so he is a non-resident for the previous year 2016-17 (assessment year 2017-18). Under section 5(2) he will be taxed only on income received or deemed to be received in India, and income accruing or arising (or deemed to) in India.
The short fall is just 10 days (365 − 355). Since he first came in 2012-13, no earlier stay can be added, so the result does not depend on any fact the question leaves open.
Where the 5 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | The two tests of section 6(1) for an individual | 2 |
| 2 | Days in the previous year and in the four preceding years | 2 |
| 3 | Conclusion: non-resident for assessment year 2017-18 | 1 |
| Total | 5 |
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