Residential status from past stays and taxable income of a not ordinarily resident

Assumptions

1. Ms. Shikha's job is based in India and her trips abroad are on her employer's business. She does not leave India to take up employment outside India (section 6(3)(b)), nor does she live abroad and come to India on visits (section 6(4)), so the 60-day test of section 6(2)(b) applies to every year.
2. Before 2018-19 she was in India throughout each year (366 days in 2015-16, a year with 29 February; 365 in the others).
3. Her salary is for services rendered in India, so it accrues in India. The Mumbai flat's annual value is the rent received (no municipal value, fair rent or municipal taxes are given).
4. Income-tax is computed under the default regime of section 202(1), as the question says.

Residential status for tax year 2026-27

Basic condition. She was in India for 183 days in tax year 2026-27, which is 182 days or more, so she is resident (section 6(2)(a)).

Ordinarily or not ordinarily resident. Her status in each preceding year (section 6(2)):

Deemed residence. Whatever the days, section 6(7) makes a citizen of India resident in a tax year if she is not liable to tax in any other country or territory by reason of her domicile, residence or similar criteria and her total income other than income from foreign sources exceeds ₹15 lakh in that year. The question gives neither fact for 2022-23 or 2025-26, so those years are taken as non-resident on the day counts. If she was deemed resident in either, she would be non-resident in fewer of the ten years, so test (i) below still fails, and test (ii) counts days only, so it still holds: her status for 2026-27 is the same.

Section 6(13)(a) makes an individual not ordinarily resident if either test is met:

• 1. non-resident in nine out of the ten preceding tax years (2016-17 to 2025-26): she was non-resident in only 2, so this test is not met;
• 2. in India for 729 days or less in the seven preceding tax years (2019-20 to 2025-26): 150 + 170 + 80 + 50 + 78 + 80 + 120 = 728 days, which is 729 or less, so this test is met.

Ms. Shikha is resident but not ordinarily resident (NOR) in India for tax year 2026-27.

Scope of total income (section 5(1))

A not ordinarily resident person is taxed on income (a) received or deemed to be received in India, and (b) accruing or arising (or deemed to) in India. Income accruing outside India is taxed only if it is from a business controlled in, or a profession set up in, India (section 5(1)(c)). Past foreign income brought into India is not income of the year.

Computation of taxable income for tax year 2026-27 (NOR, default regime)

Under the default regime the Chapter VIII deductions are not allowed, except those under sections 124(1), 124(2), 125(2) and 146 (section 202(2)(a)(xii)); none of these is claimed here, so the taxable income is ₹14,53,000.

Notes

1. The other reading of the earlier years. If her trips were read as visits to India by a citizen living abroad (section 6(4)), only the 182-day test would apply in the earlier years, in any year in which her income other than from foreign sources did not exceed ₹15 lakh; above that the 60 days of the second test become 120 days (section 6(5)). The question does not give her Indian income in those years. If it was ₹15 lakh or less in each of them, she would be non-resident from 2019-20 to 2025-26, 7 of the 10 preceding years; if it exceeded ₹15 lakh in a year, the 120-day test could make her resident in that year (2020-21, with 170 days and 1,110 days in the four years before it, would be one). Either way she is not ordinarily resident by the 728-day count, which does not depend on income. Her status for 2026-27 rests on 183 days alone, so the result is the same: resident but not ordinarily resident.
2. Had she been ordinarily resident, the other 50% of the bond interest (₹25,000), which accrues outside India, would also be taxable, giving ₹14,78,000. The ₹5,00,000 Dubai gain would still be excluded, as it is a remittance of a past year's income.