Residential Status Contd…

Practical Problems:
• Problem 1. X, after about 30 years’ stay in India, returns to America
on January 29, 2015. He returns to India in June 2017 to join an
American company as its overseas branch manager. Determine his
residential status for the assessment year 2018-19.
Solution : 1
• Solution : For the assessment year 2018-19, the year 2017-18 is the
previous year.
• During 2017-18, X is in India for more than 274 days( 305 days to
precise). He is, therefore, resident in India.
• He is resident in India for 2 years out of 10 years (i.e.,2007-2008 to
2016-17
• and he has stayed for more than 730 days during the seven years
preceding the previous year 2017-18.
• He is, therefore, resident and ordinarily resident in India for the
assessment year 2018-19.
• Problem 2. Indian citizen and businessman Shri Hari, who
resides in Kolkata, went to France for employment
purposes on 15.8.2017 and came back to India on
10.11.2018. He has never been out of India in the past.
• (a) Determine residential status of Shri Hari for the
assessment year 2018-19.
• (b) Will your answer be different if he had gone on a
leisure trip?
Solution:2
• (a) The previous year for the assessment year 2018-19 is 2017-18.
During this period he was in India for 137days (30+31+30+31+15). As
he is not in India for 182 days, he does not satisfy the first condition
of category
• The second condition of category ‘A’ is also not satisfied because he is
a citizen of India and leaves India during the previous year for
employment outside India and is therefore, covered under exception
No. 1
• (b) In this case, although he does not satisfy the first condition of
category A, he satisfies the second condition as he was in India for
more than 60 days in the relevant previous year and was also here for
more than 365 days during four preceding previous years. He is
therefore, resident in India. The exception will not be applicable to
him because he did not leave India for the purpose of employment.
• He satisfies both the conditions of category B because he was always
been in India before 15.8.2017.
• The status of the assessee for the previous year 2017-18 will in this
case be resident and ordinarily resident in India.
• Problem 3. ‘B’, an Indian citizen left India for the first time on
21.9.2016 for employment in Denmark. During the previous year
2010-17 he comes to India on 5.5.2017 for 150 days. Determine the
residential status of ‘B’ for assessment years 2017-18 and 2018-19.
Solution: 3
• Solution : During the previous year 2016-17 ‘B’ was in India for 174 days
(30+31+30+31+31+21) and therefore, does not satisfy the first condition.
As regards the second condition, although he was here in the four
preceding previous years for more than 365 days as he was permanently in
India but for the relevant previous year 2016-17 he should have been here
for 182 days instead of 60 days as he is a citizen of India and leaves India in
2016-17 for employment abroad.
• He neither satisfies the first, nor the second condition and is therefore,
Non-Resident in India.
• Similarly, during the previous year 2017-18 he visits India for 150 days. In
this case also, the period of 60 days will be substituted by 182 days as he is
a citizen of India. Therefore, he will be a Non-Resident in India even for
previous year 2017-16.