Residential status of individuals: section 6 days test and deemed residence

This is Part 1 of a three-Part series on tax residency under the Income-tax Act, 2025 and the Income-tax Act, 1961. This Part covers individuals. Part 2 covers companies, place of effective management and the older test of control and management wholly in India; Part 3 covers Hindu undivided families, firms, limited liability partnerships, associations of persons, trusts and every other person.

The assessment order says the assessee was resident in India for the year. The return was filed as a non-resident, the salary earned abroad was left out, and the interest on the deposits abroad was never offered. The Assessing Officer has counted the stamps in the passport, added the day of arrival and the day of departure, and arrived at a figure a few days above the line. Or he has accepted that the individual was in India for well under half the year, but has held that the individual had been in India for more than a year in the preceding four years, that the relaxation for a citizen coming on a visit was not available, and that sixty days were enough. Or, in the newest form of the dispute, he has held that a citizen who spent the year working in the Gulf is deemed to be resident because he paid no tax there.

Each of these is a finding on residential status, and residential status decides what the charge reaches. A resident is taxed on his income from everywhere; a non-resident only on income received in India or accruing or deemed to accrue here. The difference on a single year can be the whole of a foreign salary, foreign interest and foreign capital gains. Every one of those findings is contested at the level of the statute’s words: what “is in India” means for a part day, what “for the purposes of employment” covers, who is “outside India” and “comes on a visit”, what “liable to tax” means. Most of these questions are decided at the Tribunal and only a few have reached the High Courts.

This Part takes the provision limb by limb, as a practitioner defending the finding has to. From the tax year 2026-27 the rules are in section 6 of the Income-tax Act, 2025, and each section below states them under that Act first. The Income-tax Act, 1961 still governs every previous year up to 2025-26 (assessment year 2026-27), including assessments and appeals for those years begun on or after 1 April 2026, by section 536(2)(c) of the 2025 Act, and the decisions cited were all given on the earlier law. Each section sets the two texts side by side, and says where the 2025 wording differs.

Key points

• An individual is resident in India in a year if he is in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in the four preceding years: section 6(2)(a) and (b) of the 2025 Act, section 6(1)(a) and (c) of the 1961 Act. Nothing else makes an individual resident, except the deemed residence of a citizen under section 6(7) of the 2025 Act or section 6(1A) of the 1961 Act.
• The 60-day limb is displaced for a citizen who leaves India in the year for the purposes of employment outside India or as a member of the crew of an Indian ship, and for a citizen or person of Indian origin who, being outside India, comes on a visit. For the visitor whose income other than income from foreign sources exceeds Rs 15 lakh, the figure is 120 days, from assessment year 2021-22 (section 6(3) to (5) of the 2025 Act; Explanation 1(a) and (b) to section 6(1) of the 1961 Act).
• The Kerala High Court has held that going abroad for one’s own business is going abroad “for the purposes of employment” (O. Abdul Razak, 13 December 2010). The Bangalore Tribunal has held that the employment relief applies only in the year the individual leaves India, and the visitor relief only to someone who is already a non-resident (Binny Bansal, 9 January 2026). The Bombay High Court treats the travels of a person who has migrated abroad as visits (Binod Kumar Singh, 22 April 2019); our view is that “being outside India” describes where the visitor lives, not his status in the previous year.
• A citizen whose income other than income from foreign sources exceeds Rs 15 lakh is deemed resident if he is not liable to tax in any other country by reason of domicile, residence or a similar criterion: section 6(7) of the 2025 Act, section 6(1A) of the 1961 Act. Such a person is not ordinarily resident, so income accruing to him outside India is taxed only if it is received in India or derived from a business controlled in or a profession set up in India. What “liable to tax” means for a citizen living in a country without a personal income tax is open (open question 5).
• A resident is not ordinarily resident if he has been non-resident in nine of the ten preceding years, or in India for 729 days or less in the seven preceding years, and, from assessment year 2021-22, in two further cases: a citizen or person of Indian origin coming on a visit, with income other than income from foreign sources above Rs 15 lakh, who is in India for 120 days or more but less than 182 (whether the clause reaches anyone other than such a visitor is contested), and a deemed resident citizen: section 6(13) of the 2025 Act, section 6(6) of the 1961 Act.
• Several Tribunal Benches exclude the day of arrival when counting days (Fausta C. Cordeiro, Mumbai, 2012; Pradeep Kumar Joshi, Ahmedabad, 2021; Sanjay Bhaskar, Delhi, 2025). An earlier ruling of the Authority for Advance Rulings counted both the day of entry and the day of exit. The point is open; for planning, count both days.
• The Delhi High Court excluded the days an individual was held in India by an unlawful impounding of his passport (Suresh Nanda, 27 May 2015), while cautioning that this is not a rule that every involuntary stay is excluded. The Board relaxed the counting for March 2020 by Circular No. 11 of 2020 and did not grant a general relaxation for 2020-21 (Circular No. 2 of 2021), inviting affected individuals to report double taxation in Form NR instead.
• Residence is decided for the whole year. Neither Act has a split year, and residence for one source of income is residence for all.
• A treaty decides which State is the State of residence for the treaty’s purposes; it does not change residence under section 6. The tax residency certificate is a condition for treaty relief under section 159(8) of the 2025 Act and section 90(4) of the 1961 Act; the Supreme Court has held that it is an eligibility condition and not a bar to enquiry (Tiger Global, 15 January 2026).
• Where the other State’s tax year is not April to March, a certificate for that year covers only part of the Indian tax year; Form No. 41 (Form No. 10F for years up to 2025-26) asks for the period it covers. Tribunal Benches have allowed treaty residence for part of an Indian year (Sameer Malhotra, Delhi, 2022, applying the tie-breaker; Kumar Sanjeev Ranjan, Bangalore, 2019, upholding such a finding); the Revenue disputes it, and our view is that a documented part-year claim is well founded. Section 6 residence stays for the whole year. Foreign tax is credited in the Indian year in which the income is offered, proportionately where it is offered in two (rule 76 of the Income-tax Rules, 2026; rule 128 of the 1962 Rules).
• Residence under the Foreign Exchange Management Act, 1999 is a different test with a different year, a different day count and an intention element. One does not prove the other.

Why residence decides the charge: section 5

Residence matters because section 5 draws the line of the charge by it. Under section 5(1) of the 2025 Act, the total income of a resident includes all income from whatever source derived which is received or deemed to be received in India in the year, which accrues or arises or is deemed to accrue or arise to him in India, or which accrues or arises to him outside India; but where the person is “not ordinarily resident” in India “under section 6(13)”, income of the last category is included only when it is derived from a business controlled in or a profession set up in India (clause (c)). Under section 5(2), the total income of a non-resident includes only income received or deemed to be received in India, and income which accrues or arises or is deemed to accrue or arise to him in India.

Section 5 of the 1961 Act, which governs years up to 2025-26, says the same in sub-sections (1) and (2), with the carve-out for a person not ordinarily resident within the meaning of section 6(6) in a proviso to sub-section (1). Its Explanation 1 (income outside India is not received in India merely because it appears in a balance sheet prepared in India) is now section 5(3) of the 2025 Act, and its Explanation 2 (income included on accrual is not included again on receipt) is section 5(4).

So there are three statuses for an individual, and each has its own reach:

Status	What the charge reaches
Resident and ordinarily resident	Income from every source, wherever it accrues and wherever it is received
Resident but not ordinarily resident	Income received or deemed received in India; income accruing or deemed to accrue in India; foreign income only if derived from a business controlled in or a profession set up in India
Non-resident	Income received or deemed received in India; income accruing or deemed to accrue in India

For the person defending a residency finding, the money at stake is the foreign income: salary for work done abroad, interest and dividends on foreign accounts and holdings, gains on foreign assets. A finding of residence does nothing to income that was taxable anyway, so the first thing to compute in a residence appeal is what the finding actually adds. And a finding of residence is not the end of the enquiry. If the individual is resident but not ordinarily resident, income accruing to him outside India falls out again unless it is received in India or derived from a business controlled in or a profession set up in India. The two questions are separate, and an order that decides the first and is silent on the second is incomplete; the appeal should say so.

What is deemed to accrue in India is decided by section 9 of each Act, which this series does not take up. For a non-resident, salary for services rendered in India is deemed to accrue in India, and interest on an Indian account accrues here whatever the status; the residence finding changes nothing for those items. The tax deducted when a non-resident sells property in India is dealt with in TDS on property bought from an NRI and on the section 195 page.

Residential status also opens other statutes. Section 2(2) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 defines its assessee as (a) a person resident in India within the meaning of section 6 of the Income-tax Act, 1961 in the previous year, or (b) a non-resident or not ordinarily resident person who was resident in India in the previous year to which the income relates or in which the undisclosed asset outside India was acquired, that year being determined without giving effect to section 72(c) of that Act (proviso to section 2(2)); and the disclosure of foreign assets in the return turns on residence too. Those consequences are taken in the Black Money Act article, on the assessee and section 3 pages, and in crypto held abroad and the foreign asset disclosure window. A finding of residence in an income-tax assessment for a year can therefore make the individual an assessee under that Act for that year and, by clause (b), in a later year in which he is non-resident or not ordinarily resident, so far as the undisclosed income relates to the year of residence or the foreign asset was acquired in it; which is one more reason not to concede it.

The definitions frame the statuses. “Resident” means a person resident within the meaning of section 6 (section 2(96) of the 2025 Act; section 2(42) of the 1961 Act). “Non-resident” means a person who is not resident, and for a few named provisions includes a person who is not ordinarily resident: for sections 161, 174 and 312 in the 2025 Act (section 2(72)), and for sections 92, 93 and 168 in the 1961 Act (section 2(30)). For the rest of either Act, a person not ordinarily resident is a resident.

The two day-count limbs: 182 days, or 60 days with 365 in four years

Section 6(2) of the 2025 Act says an individual is resident in India in a tax year if he “is in India for a total period of one hundred and eighty-two days or more in that tax year” (clause (a)), or “is in India cumulatively for sixty days or more during that year and has been in India cumulatively for three hundred and sixty-five days or more in the four years preceding such tax year” (clause (b)). A tax year is the twelve months of the financial year beginning on 1 April (section 3(1) of the 2025 Act).

Section 6(1) of the 1961 Act, which governs years up to 2025-26, puts the same two tests as clauses (a) and (c): an individual is resident in India in any previous year if he:

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or (b) [***] (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

The text settles three things.

The test is physical presence. The words are “is in India”. Citizenship, domicile, a home in India, a family in India, the place of a bank account and the place of business are irrelevant to these two limbs. The Delhi High Court said of these limbs that “All that has to be seen is the number of days” in the year and in the preceding four years, and called the question “a pure question of fact based on a plain reading of the provisions of section 6” (CIT v. Suresh Nanda, ITA 85, 87 and 100 of 2013, 25 February 2013, para 12).

The periods are aggregated. “A total period” and “cumulatively” in the 2025 Act (and “a period or periods amounting in all” in the 1961 Act) mean that every stay in the year is added; the days need not be continuous.

The four preceding years are counted whole. The 365 days in the four preceding years can fall in any one or more of them. A person who was in India for 365 days in any one of the four years carries that into each of the next four years.

The second limb is what catches an individual who has kept a substantial connection with India while living abroad. The worked example shows how little is needed:

Year	Days in India
2022-23	120
2023-24	100
2024-25	90
2025-26	60
Four preceding years	370
2026-27	61

A foreign national who is not a person of Indian origin, with this record, is resident in the tax year 2026-27 under section 6(2)(b) of the 2025 Act: 61 days in the year, and 370 in the four preceding years. If the same individual were a citizen of India or a person of Indian origin coming on a visit, the 60-day limb would not apply to him at all. With income other than income from foreign sources of Rs 15 lakh or less, only the 182-day limb could make him resident, and 61 is less than 182. With such income above Rs 15 lakh, the second limb would apply with 120 days in place of 60, and 61 is less than 120. Either way he is non-resident. Those two reliefs are taken below.

The look-back counts years before 1 April 2026 as tax years: section 536(2)(c) itself speaks of a “tax year beginning before the 1st April, 2026”; the years 2022-23 to 2025-26 in the example are previous years under the 1961 Act and tax years in that sense.

The clause marked “[**]” in the 1961 text is the old dwelling-place test. The Board’s explanatory Circular No. 346 of 30 June 1982 records that an individual used to be resident if he maintained a dwelling place in India for 182 days or more in the year and was in India for 30 days or more in it, and that the Finance Act, 1982 omitted that test “With a view to avoiding hardship in the case of Indian citizens, who are employed or engaged in other avocations outside India” (para 7.3). The same Act introduced the relief for a citizen leaving India for employment abroad and raised the 60 days to 90 for a citizen coming on a visit, with effect from 1 April 1983, that is from assessment year 1983-84 (paras 7.3 and 7.4). The figure was raised again later: the Delhi High Court records that it stood at 150 days until the Finance Act, 1994 substituted 182 days with effect from 1 April 1995 (CIT v. Suresh Nanda*, 25 February 2013, para 11). The history matters for one reason: the circular’s phrase “employed or engaged in other avocations” is what the Kerala High Court later relied on to read “employment” widely.

Leaving India for employment abroad, or as crew of an Indian ship

Section 6(3) of the 2025 Act provides that section 6(2)(b) “shall not apply” to a citizen of India who “leaves India in any tax year” as a member of the crew of an Indian ship, or “for the purposes of employment outside India”. The practical effect is that for such a citizen, in the year he leaves, only the 182-day limb can make him resident. Explanation 1(a) to section 6(1) of the 1961 Act reaches the same result by substitution: for an individual “being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India”, sub-clause (c) applies in that year as if “one hundred and eighty-two days” were substituted for “sixty days”. One difference of wording bears on the year question. Explanation 1(a) applies sub-clause (c) “in relation to that year”, which ties the relief to the year of departure; section 6(3) of the 2025 Act omits those words; section 6(4), for the visitor, likewise omits them and speaks of an individual who “being outside India, comes on a visit to India in any tax year”. Open question 2 takes up what that omission does.

The relief has four conditions.

Citizenship. The relief is for a citizen of India. A person of Indian origin who is a foreign national does not get it, though he may get the visitor relief taken in the next section.

Leaving India. The individual must leave India in the year. The relief is tied to the year of departure.

In that year. The Bangalore Tribunal held in Binny Bansal v. DCIT (IT(IT)A 571/Bang/2023, assessment year 2020-21, 9 January 2026) that the relaxation in Explanation 1(a) “applies to the previous year in which the assessee, being a citizen of India”, leaves India (para 83). The individual had left India in February 2019 for employment in Singapore, in the financial year 2018-19; the year in dispute was 2019-20, so the relief did not apply. The Bench added that “The provision applies only to the person who are leaving India and not visiting India” (para 86). On this reading, a citizen who leaves in one year and comes back on visits in later years cannot claim Explanation 1(a) in the later years; he has to fit the visitor relief in Explanation 1(b), if he can.

For the purposes of employment outside India. The Revenue’s reading is that “employment” means a contract of service: the individual must leave to work for an employer. The assessee’s reading is that it means any occupation pursued abroad. The Kerala High Court took the wider view in CIT v. Sri O. Abdul Razak (ITA 1489 of 2009, 13 December 2010, assessment year 1989-90). The assessee had gone abroad on 24 September 1988 to run his own business and had been in India for 177 days in the year. The Court read the 1982 Memorandum and Circular No. 346 and held (para 7):

What is clear from the above is that no technical meaning is intended for the word “employment” used in the explanation. In our view, going abroad for the purpose of employment only means that the visit and stay abroad should not be for other purposes such as a tourist, or for medical treatment or for studies or the like. Going abroad for the purpose of employment therefore means going abroad to take up employment or any avocation as referred to in the Circular, which takes in self employment like business or profession.

The Mumbai Tribunal applied that reasoning to an individual who went to Mauritius on an investor’s permit to work for a company he owned entirely (ACIT v. Nishant Kanodia, ITA 2155/Mum/2023, assessment year 2013-14, 8 January 2024). The Bench held that “even if it is accepted that the assessee went to Mauritius as an Investor in Firstland Holdings Ltd., Mauritius, in which he holds 100% shareholding”, Explanation 1(a) applied, and since he had been in India for 176 days he was non-resident (para 14). The year in that case had come to the Tribunal through a search assessment; the residence point carried the foreign income with it.

An existing employee who is sent abroad by his employer also leaves “for the purposes of employment outside India”. The Authority for Advance Rulings held in British Gas India (P) Ltd., In re (AAR No. 725 of 2006, 31 July 2006), deciding the employee’s status as a threshold question for the maintainability of the application under section 245N(a), as its final ruling of 8 November 2006 records, that “the requirement of the Explanation is not leaving India for employment but it is leaving India for the purposes of employment outside India”, and that “an individual need not be an unemployed person who leaves India for employment outside India” (para 7). The employee in that ruling had been in India for 88 days and was non-resident. An advance ruling binds only the applicant and the transaction (section 245S, as the Supreme Court noted in Azadi Bachao).

For the file, the purpose has to be shown, not asserted. In each of these decisions the record held the employment contract, the work permit, the business set up abroad or the deputation letter. A return that claims non-resident status on section 6(3) of the 2025 Act or Explanation 1(a) without any of these is defending a fact it has not proved. The date of departure fixes the year. If the individual left on 25 March, the relief is for that year only; in the next year he is either within the 182-day limb, or a visitor, or resident on the 60-day limb. A return that carries the year-of-departure relief into the next year is the error Binny Bansal (paras 83 to 86) refused to accept.

The crew limb is narrower. It covers a citizen who leaves India in the year as a member of the crew of an “Indian ship” as defined in section 3(18) of the Merchant Shipping Act, 1958. Days on board a foreign-going Indian ship are a separate question. The Bombay High Court held that the salary of a non-resident marine engineer serving on a foreign-going Indian ship accrued outside India, following its view that the definition of “India” in section 2(25A) does not take in such a ship (CIT v. Avtar Singh Wadhwan, 20 November 2000, para 5). That decision was about where salary accrued, not about Explanation 1(a), and the Court confined it to its facts, the non-resident status having been fixed by the Commissioner’s earlier order of 26 October 1978, which both sides described as passed under section 264 (paras 4 and 6). It should be cited only for what it decided.

Crew of foreign-bound ships: section 6(6), Explanation 2 and the rules

Section 6(6) of the 2025 Act provides that, for a citizen of India who is a member of the crew of a foreign-bound ship leaving India, the total number of days in India in respect of that voyage is determined in the prescribed manner and subject to the prescribed conditions. Its 1961 counterpart is Explanation 2 to section 6(1), added by the Finance Act, 2015 with effect from 1 April 2015: for “an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed”.

The rule under the 2025 Act is rule 8 of the Income-tax Rules, 2026, made “For the purposes of section 6(6)”, for a citizen who is a member of the crew of a “foreign bound ship”. Under the 1961 Act it is rule 126 of the Income-tax Rules, 1962, inserted by the Income-tax (Twelfth Amendment) Rules, 2015 with effect from 1 April 2015, for a citizen who is a member of the crew of a ship. Under both rules, the period of stay in India in respect of an “eligible voyage” does not include the period beginning on the date entered in the Continuous Discharge Certificate for joining the ship for that voyage and ending on the date entered in it for signing off. An eligible voyage is one by a ship carrying passengers or freight in international traffic, which either starts from a port in India and ends at a port outside India, or starts from a port outside India and ends at a port in India.

The rule makes the Continuous Discharge Certificate the document that decides the count. A seafarer’s file needs the certificate with its joining and signing-off entries for every voyage in the year, not just a statement of days at sea. Where the entries do not match the passport or the sailing record, the Department will count the days as days in India and leave the assessee to prove otherwise. In an appeal, the rule has two limits. It applies only to an eligible voyage, so a coastal voyage between Indian ports is outside it. And it decides the count, not the status: once the days are counted, the ordinary limbs of section 6(2) and (3) of the 2025 Act (section 6(1) and Explanation 1(a) to section 6(1) of the 1961 Act) still apply.

Citizens and persons of Indian origin who come on a visit; the 120-day limb

Section 6(4) of the 2025 Act says section 6(2)(b) does not apply, subject to sub-section (5), to a citizen of India or a person of Indian origin “who being outside India, comes on a visit to India in any tax year”. Sub-section (5) says that where such a person has total income exceeding fifteen lakh rupees during the tax year “(other than the income from foreign sources)”, section 6(2)(b) applies “as if the words “sixty days” had been substituted with “one hundred and twenty days”“.

Explanation 1(b) to section 6(1) of the 1961 Act says the same thing in a different form. For an individual “being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year”, sub-clause (c) applies as if “one hundred and eighty-two days” were substituted for “sixty days”, “and in case of such person having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year”, as if “one hundred and twenty days” were substituted.

In the 1961 Act the 120-day figure came in by section 4(a) of the Finance Act, 2020 with effect from 1 April 2021, so it applies from assessment year 2021-22. The words “such person” in the current text were put in by section 4(I)(a) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (Act 38 of 2020), also with effect from 1 April 2021.

A person of Indian origin is an individual who, or either of whose parents or any of whose grand-parents, was born in undivided India (section 2(78) of the 2025 Act). The 1961 Act uses the same test through the Explanation to section 115C(e): a person is deemed to be of Indian origin “if he, or either of his parents or any of his grand-parents, was born in undivided India”.

So a visiting citizen or person of Indian origin is in one of two positions:

Income other than income from foreign sources	What makes the visitor resident
Rs 15 lakh or less	Only 182 days or more in the year
More than Rs 15 lakh	182 days or more in the year, or 120 days or more in the year with 365 days or more in the four preceding years

“Income from foreign sources” is defined in section 6(14) of the 2025 Act as “income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India) and which is not deemed to accrue or arise in India”. The 1961 Act has the same definition in the Explanation to section 6(6), which applies for the purposes of the whole section; there the closing words were added by section 4(I)(c) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from 1 April 2021. So the Rs 15 lakh is measured on Indian-source income: income accruing in India, income deemed to accrue in India, and foreign income from a business controlled in or a profession set up in India. Interest on an Indian bank account, rent from Indian property, capital gains on Indian shares and property, and income from an Indian business all count.

A worked example on the 120-day limb. A citizen comes on a visit in the tax year 2026-27. His income other than income from foreign sources is Rs 22 lakh. He is in India for 150 days in the year and was in India for 500 days in the four preceding years. He is resident under section 6(2)(b) of the 2025 Act read with section 6(5): 150 is more than 120, and 500 is more than 365. He is also not ordinarily resident under section 6(13)(b), because his income above the line exceeds Rs 15 lakh and he was in India for 120 days or more but less than 182. Income accruing to him outside India is therefore taxed only if it is received in India or derived from a business controlled in or a profession set up in India.

The contested words are “being outside India, comes on a visit”. The Bombay High Court read them in PCIT-15 v. Binod Kumar Singh (ITA 107 and connected appeals of 2017, 22 April 2019, assessment year 2006-07). The assessee had migrated abroad, set up his business interests there and lived there with his family. The Court held (para 7):

These facts would demonstrate that the assessee had migrated to a foreign country where he had set up his business interest. He pursued his higher education abroad, engaged himself in various business activities and continued to live there with his family. His whatever travels to India, would be in the nature of visits, unless contrary brought on record.

The Delhi High Court, dismissing the Revenue’s appeals in CIT v. Suresh Nanda (25 February 2013) as raising no substantial question of law, applied the 182-day figure in Explanation (b) to a citizen who had been in India for more than 365 days in the preceding four years but for less than 182 days in each year, describing the substitution as applying “in the case of citizens of India” as compared to foreigners (paras 11 and 12). It did not examine the words “being outside India, comes on a visit”.

The Bangalore Tribunal took a narrower view in Binny Bansal (9 January 2026). The assessee had been in India for 1,237 days in the four preceding years and for 141 days in the year, had moved to Singapore in February 2019, and claimed the visitor relief for 2019-20. The Bench upheld the Assessing Officer’s view that the Explanation was meant for non-residents, and concluded that “clause (b) of Explanation [1] applies only to non-residents” (para 81). It drew support from the 2020 amendment, which in its view showed that the relief was being restricted for individuals “who actually carry out substantial economic activities from India” (para 81). The relief was refused and the assessee was held resident.

The two readings can be reconciled on their facts. The Bangalore Bench itself set out Binod Kumar Singh (para 78), together with Circular No. 684 of 10 June 1994 (para 77) and the Delhi Bench’s decision in Sudhir Choudhrie (para 79), before reaching its conclusion. In Binod Kumar Singh the individual had migrated long before; in Binny Bansal the individual had left in February 2019, less than two months before the year began, and had spent long periods in India in the years before. The words “being outside India” describe where the visitor is coming from; they do not say “being a non-resident”. That textual point and the competing reading are taken in open question 3.

The two reliefs do not overlap. A citizen who leaves India for employment in a year gets the employment relief for that year (section 6(3) of the 2025 Act; Explanation 1(a) to section 6(1) of the 1961 Act). In the following years he can claim only the visitor relief (section 6(4); Explanation 1(b)), and only if he is “outside India” in the sense open question 3 discusses. The Binny Bansal Bench rejected the argument that one clause or the other must apply: clause (a) did not apply because the assessee had not left India in the year, and clause (b) did not apply because, in its view, it is available only to a person who is already non-resident (para 84). On that reading an individual who was resident in the year he left gets neither relief in the following year.

Deemed residence of citizens: section 6(7) and section 6(1A)

Section 6(7) of the 2025 Act deems an individual resident “Irrespective of the provisions of sub-sections (2) to (6)” if he is a citizen of India, “is not liable to tax in any other country or territory due to his domicile, residence, or similar criteria”, and has total income exceeding fifteen lakh rupees “(other than the income from foreign sources)”. Sub-section (8) says sub-section (7) does not apply to an individual resident under sub-sections (2) to (6).

Its 1961 counterpart, section 6(1A), inserted by section 4(b) of the Finance Act, 2020 with effect from 1 April 2021, reads:

(1A) Notwithstanding anything contained in clause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature.

The Explanation after it, added by section 4(I)(b) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 from the same date, declares “for the removal of doubts” that the clause “shall not apply in case of an individual who is said to be resident in India in the previous year under clause (1)”; that is the rule now in section 6(8). The 2025 wording differs in one respect that matters for open question 5: the 1961 Act asks whether the citizen is liable to tax “by reason of” domicile, residence or a criterion of similar nature, the 2025 Act whether he is liable “due to” domicile, residence or similar criteria.

The provision is litigated on four points.

It needs no days in India. The other limbs of section 6 count days; this one does not. A citizen who did not set foot in India in the year can be deemed resident if the other three conditions are met.

It applies only to citizens. A person of Indian origin who is a foreign national is outside it.

Three conditions, and the burden on the third is contested. Citizenship; income other than income from foreign sources above Rs 15 lakh; and the negative condition that the individual is not liable to tax in any other country or territory by reason of domicile, residence or a similar criterion. The first two are matters of record. The third is a negative proposition about foreign law and the individual’s position under it, and it is where the case is won or lost.

The consequence is limited by section 6(13)(c). A citizen deemed resident is “not ordinarily resident” under section 6(13)(c) of the 2025 Act (section 6(6)(d) of the 1961 Act). By section 5(1)(c) of the 2025 Act (the proviso to section 5(1) of the 1961 Act), his income accruing outside India is not included unless it is derived from a business controlled in or a profession set up in India. So deemed residence adds to the charge only foreign income derived from a business controlled in or a profession set up in India; income received in India was taxable anyway, and a salary earned and received abroad stays out.

That limit is what the Government said it would provide when the provision was proposed. The Ministry of Finance’s press release of 2 February 2020 (Release ID 1601641) described the proposal as “an anti-abuse provision since it is noticed that some Indian citizens shift their stay in low or no tax jurisdiction to avoid payment of tax in India”, said it was “not intended to include in tax net those Indian citizens who are bonafide workers in other countries”, and stated that “income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession”. The enacted section gives effect to that through section 6(6)(d), now section 6(13)(c). A press release is not law, and an argument that rests on it alone will not carry a case; what it does is record the mischief the section was aimed at, which is how a reading wider than that mischief is answered.

A worked example. A citizen works in a country that levies no personal income tax. He is in India for 100 days in the tax year 2026-27, and his income other than income from foreign sources (Indian rent, interest on an Indian account, gains on Indian shares) is Rs 16 lakh. He is not resident under section 6(2) to (6): 100 is less than 182, and as a citizen coming on a visit with income above Rs 15 lakh he would need 120 days with 365 in the four preceding years under section 6(2)(b) read with section 6(5), and 100 is less than 120. He is deemed resident under section 6(7) only if he “is not liable to tax in any other country or territory due to his domicile, residence, or similar criteria”. If he is deemed resident, he is not ordinarily resident under section 6(13)(c), and section 5(1)(c) keeps his salary for work abroad out of the charge so long as it is not received in India.

The “liable to tax” question. The nearest authority on this point is on the words “liable to tax” in Article 4(1) of the tax treaties, which use the same phrase with a closely similar qualifier (“by reason of his domicile, residence, place of management or any other criterion of a similar nature”).

In Union of India v. Azadi Bachao Andolan (Civil Appeals 8161-8162 and 8163-8164 of 2003, 7 October 2003), the Supreme Court rejected the argument that a company which paid no tax in Mauritius was not “liable to taxation” there. It said:

In our view, the contention of the respondents proceeds on the fallacious premise that liability to taxation is the same as payment of tax. Liability to taxation is a legal situation; payment of tax is a fiscal fact.

The Court also held that “merely because exemption has been granted in respect of taxability of a particular source of income, it cannot be postulated that the entity is not ‘liable to tax’”. It declined to follow the Authority for Advance Rulings’ ruling in Cyril Eugene Pereira, In re (AAR No. 385 of 1997, 19 May 1999), which had held that an individual living in the United Arab Emirates who was not liable to pay tax under UAE law could not claim relief under the treaty (para 92). Pereira had itself departed from the Authority’s earlier ruling in Mohsinally Alimohammed Rafik, In re (AAR No. 206 of 1994, 23 December 1994), which held an individual living in Dubai, where there was no income tax on individuals, to be resident in the UAE for the treaty because, “being a person living in Dubai and having sources of income there, he is certainly liable to be called upon to pay income-tax under the tax laws of that country” (para 19). The Supreme Court noticed Rafik in Azadi Bachao. It also accepted counsel’s contention that “the expression ‘resident’ is employed in the DTAC as a term of limitation”, and concluded that “the words ‘liable to taxation’ are intended to act as words of limitation”, so that treaty benefits “are not available to persons who are not liable to taxation”. After Azadi Bachao, the Mumbai Tribunal held in ADIT v. Green Emirate Shipping and Travels (30 November 2005, assessment year 1998-99), a case on a UAE shipping line that the Assessing Officer said paid no tax in the UAE and that the Revenue argued, as a non-corporate entity, was not taxable there at all, that the phrase “essentially refers to the fiscal domicile of such a person”, and that “if fiscal domicile of a person is in a Contracting State, irrespective of whether or not that person is actually liable to pay tax in that country, he is to be treated as resident of that Contracting State” (para 8).

How much of that carries over to section 6(7) and section 6(1A) is open question 5. The Revenue will say that section 6(1A) was enacted against precisely the reading Green Emirate adopted: a citizen living in a State that taxes nobody on personal income is the case the press release described, and a “liability” that can never produce a demand is not liability. The assessee will say that Parliament used the treaty phrase knowing how the Supreme Court had read it, and that a State which taxes on the basis of residence, at whatever rate and on whatever base, makes its residents liable to tax by reason of their residence. Under the 2025 Act the Revenue will add that section 6(7)(b), which speaks of liability “due to his domicile, residence, or similar criteria”, no longer uses the treaty’s words; the assessee, that it still makes liability, not payment, the test.

Gulf residents and the India-UAE treaty. The India-UAE treaty is a separate question from deemed residence. Article 4(1)(b) of that treaty, as substituted by Notification S.O. 2001(E) dated 28 November 2007, defines a resident of the United Arab Emirates as “an individual who is present in the UAE for a period or periods totalling in the aggregate at least 183 days in the calendar year concerned”, and a company “incorporated in the UAE and which is managed and controlled wholly in UAE”. That is a presence test, not a liability test, and it is counted over a calendar year, not the Indian tax year. It decides whether an individual can claim the treaty. It does not decide whether he is “liable to tax” in the UAE for section 6(7) or section 6(1A), and it does not decide whether he is resident in India under section 6. An individual can satisfy the treaty’s 183 days in the UAE, fail the Indian 182-day limb, and still face a deemed residence argument. The treaty then matters in two ways. If he is non-resident in India, his residence in the UAE under Article 4(1)(b) is what lets him claim the treaty’s limits on India’s tax on his Indian income. If he is deemed resident under section 6(7) (section 6(1A) of the 1961 Act), the tie-breaker in Article 4(3) arises only if that deemed residence makes him “liable to tax” in India “by reason of his domicile, residence, place of management or any other criterion of a similar nature” under Article 4(1)(a), and that is itself in dispute. The Revenue will say that the treaty asks about liability “under the laws of India”, and Indian law makes him resident. The assessee will say that the deeming rests on citizenship and the absence of foreign tax, neither of which is domicile, residence or place of management, and that the treaty treats nationality as a separate matter, the last step but one of the tie-breaker in Article 4(3)(c). The assessee will add that Article 4(1)(a) “does not include any person who is liable to tax in India in respect only of income from sources in India”; the Revenue will answer that a deemed resident, being not ordinarily resident, is chargeable on income received in India and on foreign income derived from a business controlled in or a profession set up in India, and so is not taxed on Indian-source income only. Our view is that the exclusion does not help him, because the charge on a not ordinarily resident person reaches more than Indian-source income. On the “by reason of” point we think the assessee has the better of the argument, because residence deemed on citizenship and the absence of foreign tax is not a criterion of the kind Article 4(1)(a) lists. The point is open, and the tie-breaker should be pleaded in the alternative.

What the file should contain for a citizen abroad with Indian income above Rs 15 lakh: evidence of the foreign State’s basis of taxation (its law taxing on residence or domicile), the individual’s registration or certificate of residence there where one is issued, and the computation of the Rs 15 lakh on the statutory definition. In our view the negative condition is for the Department to establish, though the Revenue contests that (open question 5); the file should make it hard to establish either way.

Not ordinarily resident: section 6(13) and section 6(6)

Section 6(13) of the 2025 Act makes a person not ordinarily resident in a tax year in three cases: (a) an individual who has been, or a Hindu undivided family whose manager has been, a non-resident in India in nine out of the ten tax years preceding that year, or in India cumulatively for seven hundred and twenty-nine days or less in the seven preceding tax years; (b) a citizen of India or a person of Indian origin whose total income excluding income from foreign sources exceeds fifteen lakh rupees during the tax year and “who has been in India cumulatively for one hundred and twenty days or more but less than one hundred and eighty-two days during the tax year”; and (c) a citizen of India deemed resident under sub-section (7). The Hindu undivided family limb is taken in Part 3.

Section 6(6) of the 1961 Act, which governs years up to 2025-26, says a person is “not ordinarily resident” in a previous year if such person is:

(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or (b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less ; or (c) a citizen of India, or a person of Indian origin, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year, as referred to in clause (b) of Explanation 1 to clause (1), who has been in India for a period or periods amounting in all to one hundred and twenty days or more but less than one hundred and eighty-two days; or (d) a citizen of India who is deemed to be resident in India under clause (1A).

Clauses (c) and (d) were added by section 4(c) of the Finance Act, 2020 with effect from 1 April 2021.

The clause for the 120-day visitor carries its own cross-reference in both Acts. Section 6(13)(b) of the 2025 Act says “as mentioned in sub-section (5)”, and sub-section (5) speaks of “the person referred to in sub-section (4)”, who is the citizen or person of Indian origin who, being outside India, comes on a visit; clause (c) of section 6(6) of the 1961 Act applies to a citizen or person of Indian origin with income above the line “as referred to in clause (b) of Explanation 1 to clause (1)”. The Revenue will say the clause protects only the visitor: an individual refused the visitor relief, and resident on the 60-day limb with 120 to 181 days in India, is outside it and is ordinarily resident unless clause (a) helps him. The assessee will say the cross-reference identifies how the income is measured, not who qualifies, since the clause names its own class (a citizen or person of Indian origin) and its own band of days. Our view is that the Revenue’s reading is the more natural one under the 2025 Act, where the chain of references runs back to sub-section (4), and is arguable under the 1961 Act; an individual who loses the visitor relief should plead clause (a) in the alternative.

The two limbs of clause (a) are alternatives. An individual is not ordinarily resident if either is met. The first limb counts years of non-residence; the second counts days in India.

A worked example. An individual has lived abroad for many years and was non-resident in every year up to 2025-26, visiting India for 40 days in each of the years 2016-17 to 2025-26. He returns to India for good on 1 January 2027.

Year	Days in India	Status under section 6(2)	Non-resident in the ten preceding years	Days in India in the seven preceding years	Result
2026-27	90	Non-resident: 90 < 182; four preceding years 160 < 365	Not applicable	Not applicable	Non-resident
2027-28	366 (leap year)	Resident	10 of 10	330	Not ordinarily resident
2028-29	365	Resident	9 of 10	656	Not ordinarily resident
2029-30	365	Resident	8 of 10	981	Resident and ordinarily resident

For 2028-29 the seven preceding years are 2021-22 to 2027-28: five years of 40 days, 90 days in 2026-27 and 366 days in 2027-28, which is 656. Both limbs are met that year. In 2029-30 the individual has been non-resident in only eight of the ten preceding years, and has been in India for 981 days in the seven preceding years, so neither limb is met and he is ordinarily resident. An individual returning after a long absence therefore usually has two years of not ordinarily resident status: the year of return and the next year if he is resident in the year of return (on the same history, a return on or before 1 October 2026 gives 182 days or more in 2026-27), or, as here, the two years after it if he returns late enough to remain non-resident in the year of return. In those years income accruing to him outside India and not received in India stays out of the charge, and the planning question, which the file should record, is what foreign assets are realised and what foreign income accrues in those years.

The phrase “non-resident in India in nine out of the ten previous years” depends on the status in each of those years, which in turn depends on the day counts for each year and the four years before it. A dispute about one year’s day count can therefore change the not ordinarily resident status of later years. An appeal on residence for one year should be filed with the following years in view.

Counting days: the day of arrival and the day of departure

Neither Act says how a part day is counted. Section 6(2) of the 2025 Act says “is in India for a total period of” so many days, or “cumulatively”; the 1961 text says “is in India … for a period or periods amounting in all to” so many days. Three readings are available: count every calendar day on which the individual was in India at any time, which counts both the day of arrival and the day of departure; exclude one of them; or count by hours.

The Authority for Advance Rulings counted both. Its ruling of 8 February 1996 in Petition No. 7 of 1995, as reproduced by the Ahmedabad Tribunal in Pradeep Kumar Joshi, says that the calculation is of “the number of days during the previous year on which the applicant was present in India”, and that “the days on which the applicant entered India as well as the days on which he left India have to be taken into account”.

The Tribunal has repeatedly excluded the day of arrival:

• Manoj Kumar Reddy v. ITO (Bangalore, (2009) 34 SOT 180). The Bench excluded the first day of arrival, relying on section 9 of the General Clauses Act, 1897, while recording that “there are two views in respect of ignoring the fraction of a day” (paras 3.20 to 3.25, as quoted in Pradeep Kumar Joshi, para 7). The later orders below follow it.
• ITO v. Fausta C. Cordeiro (Mumbai, ITA 4933 and 4934/Mum/2011, assessment year 2007-08, pronounced 29 June 2012). The assessee worked on a rig and, as the Commissioner (Appeals) recorded, always arrived late at night, after 10 pm. The Tribunal held: “If we exclude the date of arrival as it is not a complete day, the stay of assessee is les than 182 days” (para 5). The Revenue’s appeals were dismissed.
• Pradeep Kumar Joshi (deceased), through his legal heir Smt. Sangeeta P. Joshi v. ITO (Ahmedabad, ITA 452/Ahd/2020, assessment year 2016-17, 29 October 2021). The individual was employed in Dammam. The Revenue counted 184 days, the assessee 175. The Commissioner (Appeals) had counted the day of arrival on the ground that the arrivals were in the morning. The Tribunal held that “while counting days of stay in India for considering the status of “Resident” the days of arrival has to be excluded” had been held by different Benches, that the Commissioner (Appeals) had counted the day of arrival “without giving any cogent reason”, and, following the Bangalore Bench, excluded it (paras 9 to 11).
• Sanjay Bhaskar v. DCIT (Delhi, ITA 1650 and 1653 to 1655/Del/2024, 30 December 2025; residence in issue for assessment years 2017-18 to 2019-20). The Assessing Officer had counted both the day of arrival and the day of departure. The Tribunal excluded the day of arrival, following the Karnataka High Court’s decision in Manoj Kumar Reddy Nare, which it described as having confirmed the Bangalore Tribunal’s order, and Pradeep Kumar Joshi (paras 10 to 13). The individual was held non-resident for three years.

The Bombay High Court in Binod Kumar Singh left the point alone: it treated the question of the day of departure as academic on the facts (para 9).

The worked example shows why the point decides cases. An individual makes three stays in India in the tax year 2026-27: from 4 May to 19 July 2026, from 26 October to 30 December 2026, and from 1 February to 12 March 2027. Counting both the day of arrival and the day of departure, the stays are 77, 66 and 40 days, a total of 183: resident under section 6(2)(a). Excluding each day of arrival, they are 76, 65 and 39 days, a total of 180: the 182-day limb is not met. Whether the individual is resident turns on open question 1.

The file has to carry the evidence the Tribunal relied on: the passport stamps, the immigration record of each entry and exit, boarding passes, and where it matters the time of arrival. In Fausta C. Cordeiro the time of arrival was the fact that carried the case; in Pradeep Kumar Joshi the Commissioner (Appeals) counted the morning arrivals against the assessee; the Tribunal, saying that no cogent reason had been given, excluded the day of arrival by following the Bangalore Bench’s reasoning (paras 9 and 10), without dealing with the time of arrival. A day count prepared from the passport alone, without the immigration record, is weak, because stamps can be illegible and the Assessing Officer will resolve every doubt by counting the day.

Involuntary stay: a passport impounded, a lockdown

The Delhi High Court has held that days spent in India against the individual’s will can be excluded. In CIT (C)-I v. Shri Suresh Nanda (ITA 715, 722 and 723 of 2014, 27 May 2015), the assessee had been non-resident consistently, came to India on a visit beginning 28 September 2006, and could not leave because his passport was impounded on 10 October 2006; it was restored on 21 September 2011. The Tribunal had found the impounding unjustified, illegal and untenable, and the Revenue did not challenge that finding (para 22). The Court held that “his presence in India from 10.10.2006 onwards was not by his own choice or volition” (para 21), that literal interpretation “is not to be adopted if it produces manifestly unjust results or absurdly unreasonable consequences which could never have been intended” (para 19), and that “His involuntary stay during the period that followed till the passport was restored under Court’s directive, thus, must be excluded for calculating the period under Section 6(1)(a)” (para 25).

The Court added a caveat in terms (para 27):

The conclusion reached by us on the facts and in the circumstances of the case at hand cannot be treated as a thumb rule to the effect that each period of involuntary stay must invariably be excluded from computation for purposes of Section 6(1)(a) of Income Tax Act.

It confined the conclusion to the “peculiar facts” of a restraint found to be without authority of law (para 27).

The Board dealt with the COVID-19 lockdown by circular under section 119. Circular No. 11 of 2020 (8 May 2020), for the previous year 2019-20 and for an individual who had come to India on a visit before 22 March 2020, excluded: (a) for one unable to leave on or before 31 March 2020, the stay from 22 March to 31 March 2020; (b) for one quarantined on or after 1 March 2020 who departed on an evacuation flight on or before 31 March 2020 or could not leave, the period from the start of the quarantine to the departure or 31 March 2020; and (c) for one who departed on an evacuation flight on or before 31 March 2020, the stay from 22 March 2020 to the departure.

For 2020-21 the Board did not grant a general relaxation. Circular No. 2 of 2021 (3 March 2021) gave its reasons: a short stay would rarely make a visitor resident, a general relaxation of the 182 days could produce double non-residence, the tie-breaker in a treaty would resolve dual residence, an individual who became resident in exceptional circumstances would most likely be not ordinarily resident, and employment income would be taxed under the treaty’s employment article. It invited individuals still facing double taxation to file Form NR by 31 March 2021, so that the Board could decide whether any relaxation was needed. The circular is evidence of how the Board itself reads the section: it treated the days as counting, unless relaxed.

The two strands do not sit easily together, and that is open question 4. The practical point for the file: an exclusion on the Suresh Nanda footing has to be pleaded with the restraint proved (the order, the applications to lift it, the refusal) and with evidence that the individual meant to leave. The High Court treated the “omission to take steps to go abroad” as a fact that could show an intention to be resident (para 23).

The whole year: no split year

Residence under section 6 is decided for the year as a whole. Each limb of section 6(2) of the 2025 Act speaks of being resident “in a tax year” (in section 6(1) of the 1961 Act, “in any previous year”), and nothing in either Act divides a year into a resident part and a non-resident part. Section 6(12) of the 2025 Act adds that a person resident in India in a tax year “for any source of income” is deemed resident for each of his other sources; section 6(5) of the 1961 Act says the same “in respect of any source of income”.

So an individual who leaves India on 1 October for employment abroad is, if he was in India for 182 days or more in the year, resident for the whole year, and his foreign salary from October to March is in the charge unless he is not ordinarily resident. The Act gives no relief for the part of the year after departure. The employment relief (section 6(3); Explanation 1(a) to section 6(1) of the 1961 Act) helps only if he was in India for less than 182 days. Equally, an individual who arrives on 15 September to settle in India and is here for 198 days is resident for the whole year, including the months before he arrived.

The two places where the year can in effect be divided are outside section 6. The first is a treaty: the tie-breaker in Article 4 allocates residence between the two States for the treaty’s purposes. That is a treaty question, decided on the treaty’s text, and Tribunal Benches have applied or upheld the tie-breaker for part of an Indian year; that, with the certificate and the credit where the two States’ years differ, is taken in the section after the treaty layer below. The second is status: the not ordinarily resident categories keep income accruing outside India, and not received in India, out of the charge for a returning individual, and that does the work a split year would otherwise do. Neither changes the rule that residence under section 6 is for the year.

How the Department builds the case, and what the record must show

A residence finding against an individual rests on one or more of four foundations: the passport and immigration record, from which the days are counted; the four preceding years, from which the 60-day limb is built; the denial of the employment or visitor relief (section 6(3) or (4) of the 2025 Act; Explanation 1(a) or 1(b) of the 1961 Act), on the ground that the individual did not leave for employment, did not leave in the year, or was not “outside India”; and, from 2021, the deemed residence of a citizen.

For the first two, the question is one of fact. The Delhi High Court called it “a pure question of fact based on a plain reading of the provisions of section 6” (Suresh Nanda, 25 February 2013, para 12). That is true of a day count. Whether found facts satisfy a relief, such as leaving “for the purposes of employment” or coming “on a visit”, is a question of the legal effect of facts, as the Supreme Court said of the residence of a firm in The Erin Estate, Galah (taken in Part 3). The Assessing Officer who asserts residence must have a day count, and the assessee who disputes it must have his own, day by day, reconciled to the immigration record. The Tribunal is the last fact-finding forum; a day count that is not on the record before the Tribunal will rarely be considered later.

For the reliefs, the facts that make them available are within the individual’s knowledge: why he left, when he left, what he was doing abroad, whether he had migrated. The Revenue will say the assessee must prove them, and in the decisions above the Tribunal decided these claims on the documents the assessee produced. The employment contract, the work permit or residence permit, proof of the business set up abroad, the deputation letter, the foreign tax registration and the family’s residence abroad are the documents that carried the cases above.

For deemed residence, the Department invokes the provision and in our view must establish all three conditions; on the negative one, the Revenue will say the foreign position is within the individual’s knowledge (open question 5). The assessee should not leave the negative to inference: evidence of the foreign State’s basis of taxation, and of the individual’s status under it, answers it directly.

On procedure, the residence finding may be made in the draft order under section 275 of the 2025 Act (section 144C of the 1961 Act) where the individual is non-resident in the return, or in a search assessment where the foreign income is found in seized material. Nishant Kanodia was a search case; Binny Bansal and Raghav Agarwalla came through the Dispute Resolution Panel route. The forum and the time limits follow the route. A finding of residence for one year also affects the not ordinarily resident status of later years, and makes the individual an assessee under the Black Money Act for income of that year and foreign assets acquired in it, even in a later year in which he is non-resident or not ordinarily resident (section 2(2)(b) of that Act). The appeal should be framed with those years and that statute in view.

The treaty layer: Article 4, the tie-breaker and the tax residency certificate

An individual resident in India under section 6 is often resident in another State under its law as well, and the treaty then decides which is the State of residence. The treaty does not alter section 6. It decides, for the treaty’s purposes, which of the two States is the State of residence, and that decides which of them may tax what.

Domestic residence first. Article 4(1) of many of India’s treaties defines a resident of a Contracting State by reference to that State’s law: a person “liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature”, in the words of Article 4(1)(a) of the India-UAE treaty for India. Whether an individual is resident in India is therefore decided under section 6 first. The Mumbai Tribunal sent back an assessment in which the Assessing Officer had used the treaty to decide domestic status: “The AO has wrongly invoked the provisions of Article 4 of DTAA for determination of residential status of the assessee” (Raghav Agarwalla v. ITO, ITA 4258/Mum/2023, assessment year 2021-22, 21 October 2024, para 4). The matter went back to the Assessing Officer on the domestic question.

The tie-breaker. Where an individual is resident in both States under their domestic laws, Article 4(2) of many of India’s treaties applies a ladder of tests in order. The Board set out the ladder in the India-USA treaty in Circular No. 2 of 2021:

(a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; (d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

The circular’s own summary is that, under this ladder, a person can be resident of both countries only if he has a permanent home in both or neither, his centre of vital interests cannot be determined, he has a habitual abode in both or neither, and he is a national of both or neither; and that even then the treaty provides the mutual agreement procedure. The India-UAE treaty has substantially the same ladder as its Article 4(3), after the 2007 substitution renumbered it, though its clause (c) differs in wording.

The ladder is fought on facts: where the family lives, where the house is owned or rented and kept available, where the bank accounts, investments, clubs and business are, where the individual spends his time across the year. The Bangalore Tribunal applied it in Binny Bansal and held the individual resident in India under the treaty as well (paras 91 to 106). A file that relies on the ladder needs the lease or title of the foreign home, evidence that the Indian home was not available to him (or was let out), the family’s residence and schooling abroad, and the pattern of days. The treaty asks whether a permanent home is “available to him”, and the assessee’s case is that availability, not ownership, is the question the text puts. The Bangalore Bench in Binny Bansal nevertheless found a permanent home in India in owned property, including a house the assessee said was under construction, relying on his failure to say where he stayed during his 141 days in India, and held that “The distinction cannot be made with respect to more permanence such as own house property in India compared to a rented premises” (para 95). The file must therefore account for where the individual actually stayed on every visit.

The tax residency certificate. A non-resident who claims relief under a treaty must have a certificate of his residence from the Government of the other country and must provide the prescribed documents and information. Section 159(8) of the 2025 Act puts both conditions in one sub-section: a non-resident is entitled to relief “only when” (a) he obtains the certificate and (b) he provides the prescribed documents and information. In the 1961 Act the certificate is required by section 90(4), inserted by section 32 of the Finance Act, 2012 with effect from 1 April 2013, and section 90(5), inserted by section 23 of the Finance Act, 2013, requires him also to provide “such other documents and information, as may be prescribed”; the same section of the 2013 Act removed the words “containing such particulars as may be prescribed” from sub-section (4), both changes taking effect from 1 April 2013.

Under the Income-tax Rules, 2026, the prescription is rule 75: Form No. 41 for the non-resident’s documents and information (rule 75(1)), the duty to keep the documents that substantiate it (rule 75(2)), Form No. 42 for a resident’s application and Form No. 43 for the certificate (rule 75(3) and (4)). Under the Income-tax Rules, 1962 it is rule 21AB. The non-resident gives in Form No. 10F his status, nationality or country of incorporation, his tax identification number in the country of residence, the period for which the residential status in the certificate applies, and his address there during that period, except so far as the certificate already contains them (sub-rules (1) and (2)). Under sub-rule (2A) he must keep the documents that substantiate the information, and an income-tax authority may call for them. A resident who needs a certificate of Indian residence for a treaty abroad applies in Form No. 10FA and the Assessing Officer issues it in Form No. 10FB (sub-rules (3) and (4)). Rule 75 does not itself list the particulars, and has no counterpart to rule 21AB(2).

The Ahmedabad Tribunal held in Skaps Industries India Pvt Ltd v. ITO (ITA 478 and 479/Ahd/2018, assessment years 2013-14 and 2014-15, 21 June 2018) that section 90(4), having no non obstante clause against section 90(2), cannot be read as a limitation on the treaty’s priority: “an eligible assessee cannot be declined the treaty protection under section 90(2) on the ground that the said assessee has not been able to furnish a Tax Residency Certificate in the prescribed form” (para 10). The Bench also held that residence under the treaty still has to be proved by other evidence where the certificate is not produced, and remanded for that (paras 12 to 15 and 19). Skaps also said, following the Punjab and Haryana High Court in Serco BPO, that once the certificate is furnished the Assessing Officer is “denuded of the powers to requisition further details” (para 9); that part of the order cannot stand with Tiger Global. The case concerned withholding on a payment to a United States company.

The Supreme Court held in Authority for Advance Rulings (Income Tax) v. Tiger Global International II Holdings (Civil Appeals 262 to 264 of 2026, 15 January 2026) that “Section 90(4) of the Act only speaks of the TRC as an “eligibility condition”. It does not state that a TRC is “sufficient” evidence of residency, which is a slightly higher threshold” (para 37), and that “the mere holding of a TRC cannot, by itself, prevent an enquiry subsequent to the amendments brought into the statute, particularly by the introduction of Section 90 (2A) and Chapter XA to the Act and the Rules, if it is established that the interposed entity was a device to avoid tax” (para 43). The Court also held that the Board’s earlier circulars treating the certificate as sufficient evidence, which Azadi Bachao had upheld as valid directions under section 119, “having since been superseded by statutory amendments, will not come to the aid of the respondents” (para 43).

For an individual, Skaps and Tiger Global together produce a working rule. The certificate is the starting document; without it, relief can still be argued on Skaps but the individual must prove treaty residence by other means. With it, the Assessing Officer may still enquire, and the certificate is evidence, not a conclusion. Tiger Global was a company case decided on a treaty abuse footing. Its statement that the certificate “is not binding on any statutory authority or Court unless the authority or Court enquires into it and comes to its own independent conclusion” (para 37) is general, though its conclusion that the certificate “lacks the qualities of a binding order” was drawn from the particular certificate before it; the passage on enquiry despite the certificate (para 43) is framed around an interposed entity. For an individual whose foreign residence is real, the enquiry it permits is an enquiry into facts the individual can usually answer.

The GAAR override in section 159(6) of the 2025 Act (section 90(2A) of the 1961 Act) does not usually touch an individual’s residence. Where it does, the analysis is in the GAAR series.

When the two countries’ tax years differ: the certificate, the tie-breaker, the 183 days and the credit

India’s year runs from April to March: the tax year under section 3(1) of the 2025 Act is “the twelve months period of the financial year commencing on the 1st April”, the same twelve months that were the previous year under the 1961 Act. The India-Singapore treaty defines the fiscal year as the previous year for India and the calendar year for Singapore (Article 3(1)(g)); the India-UK treaty, as the previous year for Indian tax and a year beginning on 6 April for United Kingdom tax (Article 3(1)(d)). The India-USA treaty defines the taxable year only for Indian tax, as the previous year (Article 3(1)(k)). The India-UAE treaty has no definition, though its Article 4(1)(b) counts an individual’s 183 days in the calendar year (taken above under Gulf residents).

Section 6 does not move with the other State’s year; what changes is the treaty claim and the credit for foreign tax, at four points.

The certificate’s period. Section 159(8)(a) of the 2025 Act and section 90(4) of the 1961 Act ask for “a certificate of his being a resident” in the other country, and say nothing about the period it must cover. The forms do. Form No. 41 asks for the “Tax Year” (item 7), separately for the “Period for which the residential status as mentioned in the certificate referred to in section 159(8) is applicable” (item 11), and for a copy of the certificate (item 13); Form No. 10F asks for the period at item (v). The Department’s explanatory note to Form No. 41 says that the certificate “must be valid for the relevant financial year in India”; neither rule 75 nor the form says so. A certificate for a calendar year covers January to March of one Indian year and April to December of the next, so a claim for a whole Indian year needs two. Tax on a sum other than salary payable to a non-resident (section 393(2) of the 2025 Act, Table item 17; section 195 of the 1961 Act) is deducted at the time of credit or payment, whichever is earlier; in our view the certificate that matters for the deduction is the one covering that date.

Two Tribunal decisions on individuals who moved in the middle of a year treated the certificate as evidence for the period it covered: the Singapore certificate “for the period under consideration” in Sameer Malhotra v. ACIT (Delhi, para 7.10, taken below), and a “copy of tax residency certificate issued by Indonesia in Calendar Year 2016”, for a claim covering January to March 2016, in Narinder Pal Singh v. ACIT (Delhi, paras 2 and 11, taken below). In Kumar Sanjeev Ranjan (taken below) the assessee filed United States certificates for 2012 and 2013, but treaty residence was decided on the other facts, the Bench noting that the Commissioner (Appeals) had made only a passing reference to them (paras 19 and 21). In Sivakarthick Raman v. ACIT (Chennai, 7 July 2025) there was no certificate: the individual, in India for no day of the year, relied on his China tax returns for the calendar years 2021 and 2022 (paras 3 and 15), and the Bench recorded him as resident of China for the “period covering 01.04.2021 till 31.03.2022” (para 40) and allowed exemption under the India-China treaty (para 43) without discussing the certificate. None of these decisions decides whether a certificate for a foreign year that does not match the Indian year satisfies the section.

The Revenue says that months the certificate does not cover are months for which the condition is not met, as the Department’s note says; that Tiger Global calls the certificate an “eligibility condition” (para 37); and that Skaps Industries, the assessee’s own authority, said proof without a certificate “appears to be much more demanding” (para 12) and, among its reasons for treating a self-declaration made in a later year as no proof of residence, said that nothing showed it would hold good “for the relevant period” (para 15). The assessee says that the section asks for a certificate of residence, not one for the Indian year; that Form No. 41 asks for the tax year (item 7) and the certificate’s period (item 11) as separate items, and Form No. 10F for the previous year in its opening words and the period at item (v), which assumes they may differ; that a note is not a rule; and that treaty residence can be proved by other evidence where there is no certificate for the period (Skaps Industries, paras 10 and 12; Sivakarthick Raman, on the China tax returns). An individual resident in India under section 6 who claims residence abroad through the tie-breaker has a further point: section 159(8) and section 90(4) are addressed to an assessee “not being a resident”, so for him the certificate is evidence rather than a statutory condition, though Sameer Malhotra referred to section 90(4) and found it satisfied (para 7.11). Our view: hold certificates that between them cover every day of the Indian year for which relief is claimed, state in Form No. 41 (Form No. 10F for years up to 2025-26) the period each covers, and prove any gap by other evidence such as the foreign return, the residence permit, the lease and the employment. Where relief is claimed only for part of the year, a certificate covering that part should be enough.

The tie-breaker for part of a year. Neither Act has a split year, but the Tribunal has applied the treaty tie-breaker to part of an Indian year. In Sameer Malhotra v. ACIT (ITA 4040/Del/2019, assessment year 2015-16, 28 December 2022) the individual worked in India until November 2014 and in Singapore from 15 December 2014, was in India for 182 days or more in the year, and claimed that his Singapore salary for 15 December 2014 to 31 March 2015 was taxable only in Singapore. The Delhi Bench confined the issue to the income of that period (para 7.1), recorded the assessee’s case that, his Indian house being let, the permanent home test “for the period” went in his favour (para 7.2), recorded, citing the United Nations Model, that the relevant facts are those during the period when residence affects tax liability, “which may be less than an entire taxable period” (para 7.5), and itself found his personal and economic relations “at that particular time/period” and his habitual abode in Singapore (paras 7.10 and 7.11). In DCIT v. Kumar Sanjeev Ranjan (ITA 1655/Bang/2017, assessment year 2013-14, 15 March 2019) a United States citizen returned there in August 2012 after an assignment in India. The Assessing Officer held that there is no concept of split residency under the Act or the treaty (para 16); the Commissioner (Appeals) held him a treaty resident of the United States for August 2012 to March 2013, his centre of vital interests being there (para 19). The Bangalore Bench dismissed the Revenue’s appeal, holding that those conclusions could not be faulted (para 21) and that, residence being tested under Article 4, section 6(1)(c) did “not assume any importance” (para 22); it upheld a period-wise finding without discussing split residency in its own words. In Narinder Pal Singh v. ACIT (ITA 3786/Del/2019, assessment year 2016-17, 7 March 2023) the claim was treaty residence of Indonesia for January to March 2016 (para 2); the Delhi Bench found no permanent home available in either State (para 14) and the habitual abode in Indonesia, saying “The period is irrelevant” (para 15).

Sameer Malhotra also relied (para 7.9) on Raman Chopra v. DCIT (Delhi, 5 May 2016) as having held an individual resident of the United States for April to June 2010. That order, in an appeal against a penalty under section 271(1)(c), set out the period-wise tie-break in recording the facts (para 7) but decided only that the penalty was not justified (paras 2, 7.2 and 8); the quantum disallowance was not before it, and it is not a decision on split residence. In Vishal Wanchoo v. ITO (Delhi, 17 April 2026), where the assignment in India ended in February 2020 and the assessee relied on Kumar Sanjeev Ranjan and Sameer Malhotra, the Bench treated the tie-breaker as deciding whether the year’s global income was taxable in India or the United States, and remanded the issue for facts (paras 1.1, 2 and 3), without considering an allocation by period.

The Revenue says that Article 4(2) settles “his status”, a single status, for the year India applies the treaty to, and that Sameer Malhotra rests on a commentary and a penalty order. The assessee says that Article 4(2) asks where he “has” a permanent home and a habitual abode, facts at a time and not across a year, and that the decisions on the point have allocated by period. Our view is that a part-year claim is well founded where the move is real and documented, though it rests on Tribunal decisions. The record should show the date of the move and the facts for each step of the ladder on either side of it. The allocation leaves residence under section 6 untouched; it decides only which State may tax the income after the move.

The 183-day condition for employment. Salary for work in the other State is taxable only in the State of residence if, among other conditions, the recipient is present in the other State for not more than 183 days “in the relevant taxable year” (India-USA, Article 16(2)(a)), “during the relevant fiscal year” (India-UK, Article 16(2)(a)), “in the relevant fiscal year” (India-Singapore, Article 15(2)(a)) or “in the relevant “previous year” or “year of income”, as the case may be” (India-UAE, Article 15(2)(a)). The year can change the answer: a stay from 2 October to 31 July (not in a leap year), counting the first and the last day, is 181 days in the first Indian year and 122 in the second, but 212 days in the second calendar year. The treaties do not say whose year is relevant. The question is whether the State where the employment is exercised may tax. Where a treaty defines the years (India-Singapore, India-UK), it ties each State’s year to its own tax; where it does not (the United States’ year in the India-USA treaty, both years in the India-UAE treaty), Article 3(2) gives the term the meaning it has under the law of the State applying the treaty. Our view, therefore, is that the year of the State where the employment is exercised governs: an Indian resident working in Singapore counts in Singapore’s calendar year, a Singapore resident working in India in India’s tax year. The other reading, the year of the State of residence, gives the opposite count; the point is undecided, and a stay planned near the limit should be tested both ways.

Foreign tax credit. A resident who pays tax abroad for a foreign year gets credit under rule 76 of the Income-tax Rules, 2026 (rule 128 of the 1962 Rules) “in the tax year in which the income corresponding to such tax has been offered to tax or assessed to tax in India” (rule 76(1); rule 128(1) says “in the year”). Where that income is offered in more than one tax year, credit is allowed across those years “in the same proportion in which the income is offered to tax or assessed to tax in India” (rule 76(2); proviso to rule 128(1)). In our view, foreign tax for a calendar year on salary that India taxes partly in one tax year (January to March) and partly in the next (April to December) is within that provision, and is apportioned between the two Indian years in that proportion.

The claim is made in Form No. 44 (Form No. 67 under rule 128(8)), a statement of the foreign income offered for the tax year and the tax on it, with a certificate or statement from the foreign authority or the deductor, or signed by the assessee, accompanied under the 2026 Rules in each case by proof of payment or deduction (rule 76(10) and (11); under the proviso to rule 128(8), only the assessee’s own statement needs that proof). It is to be furnished within twelve months from the end of the tax year in which the income is offered, if the return was furnished within the time under section 263(1) or (4) (rule 76(12)); rule 128(9) says by the end of the assessment year, for a return within section 139(1) or (4), which is the same date. Form No. 44 is verified by an accountant where the foreign tax for the tax year is Rs 1,00,000 or more (rule 76(16)(b)); rule 128 itself has no such requirement for Form No. 67. The foreign tax for the calendar year may not be finally determined when the statement for the first Indian year is due; rule 76 (rule 128) makes no express provision for that case, and the credit is claimed on the tax deducted or paid as evidenced under rule 76(10)(b) and (11) (rule 128(8)(ii) and its proviso). Foreign tax which the assessee disputes is a separate case: it is credited, for the year in which the income was offered, only if within six months from the end of the month in which the dispute is finally settled the assessee furnishes evidence of settlement and payment and an undertaking that no refund has been or will be claimed (rule 76(5) and (6); rule 128(4) and its proviso), under the 2026 Rules by an intimation in Form No. 45 (rule 76(15)). Where foreign tax already credited is later refunded, Form No. 44 must also be furnished, whether the refund results from a carry back of loss, a revision of return or “any other reason” (rule 76(14)); rule 128(10) requires Form No. 67 only on a carry back of loss.

Income-tax residence is not FEMA residence

The Foreign Exchange Management Act, 1999 has its own definition, distinct from section 6. Section 2(v)(i) of that Act says “person resident in India” means “a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year”, but does not include (A) a person who has gone out of India or who stays outside India for or on taking up employment outside India, for carrying on outside India a business or vocation outside India, or for any other purpose in circumstances indicating an intention to stay outside India for an uncertain period; or (B) a person who has come to or stays in India otherwise than for or on taking up employment in India, for carrying on in India a business or vocation in India, or for any other purpose in circumstances indicating an intention to stay in India for an uncertain period. Clauses (ii) to (iv) bring in bodies registered or incorporated in India and offices, branches and agencies.

The two tests differ on every point that matters:

	Income-tax Act, section 6	FEMA, section 2(v)
Year	The same year	The preceding financial year
Day count	182 days or more; or 60 (or 120) with 365 in four years	More than 182 days
Intention	Irrelevant to the day limbs	Central: purpose and intention to stay for an uncertain period
Departure for employment	Displaces the 60-day limb in the year of leaving	Excludes the person who has gone out for employment outside India
Deemed residence	Citizens not liable to tax abroad (section 6(7); section 6(1A) of the 1961 Act)	No equivalent
Bodies corporate	Indian company or place of effective management in India	Registered or incorporated in India

An individual can therefore be a person resident outside India under the Foreign Exchange Management Act from the day he leaves for a job abroad, and still be resident under section 6 for the year he left if he was in India for 182 days. On return the two statutes again ask different things: a returning individual’s status for exchange control turns on his residence in India in the preceding financial year and, under clause (B), on the purpose of his return, not on the income-tax day counts, while for income tax he may be non-resident in the year of return and not ordinarily resident for two years after it. A document filed with a bank under exchange control, describing the individual as non-resident or resident, is not an admission of status under section 6, and the Assessing Officer’s reliance on it should be met on that footing. This series deals only with income-tax residence.

Open questions, argued both ways

The open questions are numbered across the series. Questions 1 to 6 are in this Part; questions 7 to 10, on companies, are in Part 2; questions 11 to 13, on other assessees, are in Part 3.

Open question 1: are the day of arrival and the day of departure both counted?

That both are counted (the Revenue). The section asks whether the individual “is in India” for a period or periods amounting in all to the stated number of days. On the day he lands he is in India; on the day he leaves he is in India. Nothing in the section speaks of complete days, of hours, or of excluding a first or last day. The Authority for Advance Rulings read it that way in 1996: the days on which the applicant “entered India as well as the days on which he left India have to be taken into account”. The exclusion of the first day has been built on section 9 of the General Clauses Act, 1897, as the orders quoted in Fausta C. Cordeiro show; but section 6 does not express a period running from an event, it counts presence. A rule that turns on the hour of landing invites argument about every flight and has no footing in the text. The Bangalore Bench whose order the later Benches followed itself recorded that there are two views, and the Law Lexicon passage it set out treats presence “for any part of one day” as “sufficient residence for that day” (as quoted in Pradeep Kumar Joshi, para 7).

That the day of arrival is excluded (the assessee). The Tribunal has excluded the day of arrival in Bangalore (Manoj Kumar Reddy), Mumbai (Fausta C. Cordeiro), Ahmedabad (Pradeep Kumar Joshi) and Delhi (Sanjay Bhaskar), and the Delhi Bench treated the point as covered by the Karnataka High Court’s decision in Manoj Kumar Reddy Nare. A day is a unit from midnight to midnight; an individual who lands at 11 pm has not been in India for that day in any sense the section can intend. The 182 days is the measure of half a year, and counting two part days as two whole days for every visit inflates the count by up to two days a visit for an individual who travels often. A taxing provision that is capable of two readings is read in favour of the subject.

Our view. The point is open. The Tribunal line is consistent and has been followed in four cities, and it is the authority to plead at the Tribunal, with the evidence of the time of arrival on the record as in Fausta C. Cordeiro. The Revenue’s textual argument has real force, Pradeep Kumar Joshi was decided against a Commissioner (Appeals) who had distinguished morning arrivals, and a High Court that reads the section afresh may well count both days. For planning, and for advice on whether to concede a year, both days should be counted.

Open question 2: what is leaving India “for the purposes of employment outside India”, and for which year?

That it is narrow (the Revenue). “Employment” in its ordinary sense is service under an employer. Parliament has used “business”, “profession” and “vocation” elsewhere in the same Act and did not use them here. A person who goes abroad to manage his own investments, or to run a company he owns, is not employed. And the relief is for the year of leaving: the words are “leaves India in any previous year”, and Binny Bansal held that the relief “applies to the previous year in which the assessee, being a citizen of India”, leaves India (para 83). An individual who left in an earlier year and returns on visits cannot claim it again. Under the 2025 Act, residence is decided tax year by tax year under section 6(2), so “in any tax year” in section 6(3) can only mean the tax year being tested, and a consolidating Act is not read as widening a relief without clear words.

That it is wide (the assessee). The Kerala High Court has held, relying on the Board’s own circular, that “no technical meaning is intended for the word “employment”“, and that going abroad to take up “any avocation as referred to in the Circular” qualifies, including business or profession (O. Abdul Razak, para 7). The Mumbai Tribunal extended that to an investor running his own company (Nishant Kanodia, para 14), and the Authority for Advance Rulings to an existing employee on deputation (British Gas India, para 7). Circular No. 346 itself describes the beneficiaries as citizens “employed or engaged in other avocations outside India”. On the year, an individual who changes his employment abroad and leaves India again in a later year, after a visit, can say he “leaves India” in that later year as well; the Bangalore Bench rejected that argument where the individual was already living and employed in Singapore and came on a brief visit (Binny Bansal, paras 85 and 86). The Delhi Bench in Sanjay Bhaskar (30 December 2025) applied O. Abdul Razak and Nishant Kanodia to hold an individual who had been non-resident since 1998 and had taken up permanent residence in the United Kingdom to be out of India “for the purpose of employment” in each of assessment years 2017-18 to 2019-20 (paras 15 to 17). Under the 2025 Act the assessee can add that section 6(3) no longer contains the words “in relation to that year” and describes a citizen who “leaves India in any tax year”.

Our view. On the scope of “employment” the wider reading has High Court authority in Abdul Razak, and the Tribunal has followed it; the assessee must still prove the activity abroad, and an investor who does nothing abroad but hold shares is the weakest case. On the year, the 2025 Act’s omission of “in relation to that year” gives the assessee an argument the 1961 text did not; we think the Revenue’s reading, that the tax year is the year under test, is the more likely one, but the point is open. On the 1961 words Binny Bansal is right: the relief attaches to the year of leaving, and later years are governed by the visitor relief. Sanjay Bhaskar points the other way but does not analyse the words “leaves India in any previous year”, and on its facts the visitor relief was independently available. The second-departure argument was run and lost in Binny Bansal (paras 85 and 86); it remains arguable only for an individual who had genuinely re-established himself in India between the two departures.

Open question 3: who is “being outside India” and “comes on a visit”?

That only a non-resident can claim it (the Revenue). The Bangalore Tribunal has held that clause (b) of Explanation 1 “applies only to non-residents” (Binny Bansal, para 81). The relief exists to let a person who lives abroad visit without losing his status; a person who was resident in the preceding years, who has only just moved abroad, and who spends a large part of the year in India is not visiting. The Finance Act, 2020 cut the relief for individuals with substantial Indian income precisely to stop people managing their days to stay non-resident while carrying on activity from India.

That the words describe a place, not a status (the assessee). The clause says “being outside India, comes on a visit to India”. It does not say “being a non-resident”. A person whose home, family and work are abroad comes to India on a visit whatever his status was the year before. The Bombay High Court held that the travels of a person who had migrated abroad “would be in the nature of visits, unless contrary brought on record” (Binod Kumar Singh, para 7), which puts the question on the facts of the individual’s life, not on his status. The Delhi High Court applied the 182-day figure to a citizen without asking whether he had been non-resident (Suresh Nanda, 25 February 2013, para 11), though without analysis of the visit words. A reading that confines the relief to persons already non-resident cuts out the very year in which a citizen moves abroad and first visits home, and the employment relief does not fill that gap for a person who did not leave for employment.

Our view. The assessee’s reading is closer to the text. Binod Kumar Singh upheld, in a Revenue appeal, the Tribunal’s finding that a migrant’s travels were visits (paras 6 and 7); its force is as a High Court endorsement of a fact-based approach. Binny Bansal stated its conclusion as a rule of law (para 81), after considering Binod Kumar Singh, and the assessee’s answer is that the rule is not in the words; on its facts it concerned an individual whose life was still substantially in India. The file should show where the individual lives: the foreign residence permit, the home abroad, the family abroad, the work abroad. A visitor relief claimed for an individual whose family remained in India is the case the Revenue will choose to take up.

Open question 4: are days of involuntary stay counted?

That they are counted (the Revenue). Section 6 counts presence, not choice. The Board, when it wanted days excluded for the lockdown, did so by circular under section 119 for 2019-20, and did not do so for 2020-21 (Circular No. 2 of 2021), reasoning that the treaty tie-breaker and the not ordinarily resident rules would deal with hardship. That is a reading of the section by the authority charged with administering it. Suresh Nanda (2015) turned on a restraint the Tribunal had found unlawful, and the Court said in terms that it was not “a thumb rule” that each period of involuntary stay must be excluded (para 27).

That they are excluded (the assessee). The Delhi High Court held that literal interpretation is not to be adopted if it produces “manifestly unjust results or absurdly unreasonable consequences which could never have been intended” (para 19), and excluded the stay because presence “was not by his own choice or volition” (para 21). The Court went further than the facts: presence in India “against the will or without the consent of the citizen, should not ordinarily be counted adverse to his chosen course or interest, particularly if it is brought about under compulsion” (para 23), and it rejected the Revenue’s argument that section 6(1)(a) “does not permit exceptions” (para 24). The section gives the individual the choice of how long to be in India; where the choice has been taken away by an act outside his control, the purpose of the count fails. Illness, a court order, a travel ban and the closure of airspace are all the same in principle.

Our view. Suresh Nanda is authority for excluding days of a stay compelled by an unlawful restraint, proved on the record, of an individual who was trying to leave. Beyond that it is an argument, not a rule, and the Court said so. An exclusion claimed for illness or for a lawful restraint will be decided on its facts and the Revenue’s literal reading will usually prevail. For 2019-20 Circular No. 11 of 2020 applies in terms; for 2020-21 the Board granted no general relaxation (Circular No. 2 of 2021), and a claim outside any relaxation the Board may have given on a Form NR rests on Suresh Nanda alone.

Open question 5: when is a citizen “not liable to tax in any other country” for deemed residence?

That a citizen in a State with no personal income tax is not liable (the Revenue). Section 6(1A) was enacted to catch citizens who move to low or no tax jurisdictions; the Ministry’s press release of 2 February 2020 said so. A person who can never be called upon to pay income tax in his State of residence is not liable to tax there in any meaningful sense, whatever that State’s law says about residence. Under the 2025 Act the words are “due to his domicile, residence, or similar criteria”, which no longer follow the treaty’s “by reason of … any other criterion of a similar nature”, so the treaty decisions carry over less readily. The Supreme Court in Azadi Bachao itself accepted counsel’s contention that “the expression ‘resident’ is employed in the DTAC as a term of limitation”, and concluded that “the words ‘liable to taxation’ are intended to act as words of limitation”; and that case concerned Mauritian companies within a taxing system. Green Emirate, although the Revenue’s case there was that the UAE did not tax non-corporate entities at all, was a treaty decision on a non-individual, given without the assessee being represented (para 3) and before section 6(1A) existed; and Rafik, the ruling most favourable to the Gulf resident, accepted that on the natural reading an individual in Dubai was not liable to tax there (para 15). On burden, the individual’s position under the foreign State’s law is a fact within his own knowledge and records; an individual who files as non-resident and produces nothing about his foreign tax position risks the result in V.V.R.N.M. Subbayya Chettiar v. CIT, where a family that, called upon to adduce evidence, did not produce the correspondence was held not to have discharged the onus, and the normal presumption was given effect to.

That liability is a legal situation, not a payment (the assessee). The section uses the treaty phrase “liable to tax … by reason of his domicile or residence or any other criteria of similar nature”, and section 6(7)(b) of the 2025 Act keeps the test of liability (“is not liable to tax in any other country or territory due to his domicile, residence, or similar criteria”); and the Supreme Court held of that phrase that “Liability to taxation is a legal situation; payment of tax is a fiscal fact” (Azadi Bachao). The Authority for Advance Rulings held an individual living in Dubai, where there was no income tax on individuals, resident in the UAE for the treaty because he was “liable to be called upon to pay income-tax” there (Rafik, para 19), and the Supreme Court declined to follow Pereira, which had departed from it. The Mumbai Tribunal held fiscal domicile enough, “irrespective of whether or not that person is actually liable to pay tax in that country”, and held a UAE entity resident “irrespective of whether or not the UAE actually levies taxes on non-corporate entities” (Green Emirate, para 8). Where the State has a tax law that reaches its residents by reason of residence, its residents are liable to it, even if the base or rate leaves them with nothing to pay. Subbayya Chettiar does not carry the Revenue’s point across. The “normal presumption” there was the one section 4A(b) of the 1922 Act itself created, and the onus the family failed to discharge was the onus of proving the exception that clause provided. Section 6(1A) (section 6(7) of the 2025 Act) creates no presumption of residence; the absence of foreign liability is a condition of the deeming, not an exception to it. And the Department, which invokes the deeming, must establish each condition, the negative one included.

Our view. The answer depends on the foreign State’s law, and the file must contain it. Where the State has an income tax that applies to individuals by reason of residence, the Azadi Bachao reasoning is strong and the individual is outside section 6(7) and section 6(1A). Where the State has no tax on individuals’ income at all, Rafik and Green Emirate support the assessee in the treaty context, and the assessee will rely on them; but the question under section 6(7) and section 6(1A) is one of statutory construction in light of the section’s purpose, which a treaty decision does not settle, and the Revenue’s answer, that the section was enacted precisely to reverse that outcome for citizens, is likely to prevail before a Bench reading the section with the press release. On burden, we think the Department must establish the negative, but an assessee who leaves the foreign law off the record takes the risk that the finding goes against him on the record as it stands. The assessee’s fallback is the not ordinarily resident consequence in section 6(13)(c) of the 2025 Act (section 6(6)(d) of the 1961 Act), which keeps his foreign earnings, so far as they are not received in India, out of the charge, and the real dispute shifts to whether any foreign income is derived from a business controlled in India.

Open question 6: how is the Rs 15 lakh computed?

That it is the total income as computed, after deductions (the assessee). The section speaks of “total income, other than the income from foreign sources”. The section uses “total income”, the Act’s expression for the income computed under it on which tax is charged, and not “income” or “receipts”. Exempt income does not enter the computation. The Rs 15 lakh is therefore tested on the computed total income from Indian sources.

That it is the gross Indian-source income (the Revenue). The phrase is used as a measure of economic connection with India, not as a computation of tax. Reading it as total income after deductions lets an individual with large Indian receipts keep under the line by claims and set-offs. The definition of “income from foreign sources” was itself narrowed with effect from 1 April 2021, by section 4(I)(c) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which added the words “and which is not deemed to accrue or arise in India”, so that income deemed to accrue in India is counted on the Indian side.

Our view. The assessee’s reading follows the text of both Acts. The 2025 Act uses “total income … (other than the income from foreign sources)” in section 6(5) and 6(7)(c), and “total income excluding income from foreign sources” in section 6(13)(b)(i); the 1961 Act uses “total income, other than the income from foreign sources”. In each, “total income” is used without qualification except for the foreign-source carve-out. The 2020 amendment of the 1961 definition supports that reading, since it was made to the definition of the excluded income, not to the measure, and section 6(14) of the 2025 Act contains the same words “and which is not deemed to accrue or arise in India”, so the same reading applies. The computation should be on the record, prepared on the statutory definition, with each item classified as Indian-source or foreign-source and the deemed accrual items under section 9 placed on the Indian side.

On a live file

The Income-tax Act, 2025 governs from the tax year 2026-27; the Income-tax Act, 1961 governs every previous year up to 2025-26, including proceedings for those years begun later (section 536(2)(c) of the 2025 Act).

1. Compute what the finding adds. List the income that is taxed only if the individual is resident, and then only if he is ordinarily resident. A finding that adds little may still matter for later years and for the Black Money Act.
2. Build the day count from the immigration record. Passport stamps, the immigration record, boarding passes and, where a part day matters, the time of arrival and departure. Prepare the count both ways, counting and excluding the day of arrival, and plead the exclusion with the Tribunal authority (open question 1).
3. Count the four preceding years and the seven and ten years. The 60-day limb needs the four preceding years; the not ordinarily resident test needs the status of each of the ten preceding years and the days in the seven. A change in one year’s count moves the later years.
4. Fix the year of departure. If section 6(3) of the 2025 Act or Explanation 1(a) is claimed, the date the individual left India, and the employment, business or deputation he left for, must be on the record. The relief is for that year (Binny Bansal, para 83); under the 2025 Act see the wording point in open question 2.
5. Prove the purpose. Employment contract, work permit or residence permit, deputation letter, or evidence of the business or profession set up abroad (Abdul Razak; Nishant Kanodia; British Gas India).
6. Prove “outside India” for the visitor relief. Foreign residence permit, home, family, work and the pattern of life abroad (Binod Kumar Singh, para 7), against the Binny Bansal reading.
7. Compute the Rs 15 lakh on the statutory definition. Classify each item as Indian-source or foreign-source; place deemed accrual items under section 9 on the Indian side (open question 6). The figure decides whether 60, 120 or only 182 days applies to a visitor, whether section 6(13)(b) (section 6(6)(c) of the 1961 Act) applies, and whether deemed residence can arise.
8. For deemed residence, put the foreign law on the record. The foreign State’s basis of taxation of individuals and the individual’s status under it. We take the negative condition to be the Department’s to establish, but the Revenue contests that (open question 5); put the foreign law on the record regardless. If deemed residence is held, claim not ordinarily resident status under section 6(13)(c) or section 6(6)(d) in the same appeal.
9. For a seafarer, the Continuous Discharge Certificate. Joining and signing-off dates for each eligible voyage under rule 8 of the Income-tax Rules, 2026 (rule 126 of the 1962 Rules).
10. For an involuntary stay, prove the restraint and the attempt to leave. The order, the applications, the refusal, the date the restraint ended (Suresh Nanda, paras 21, 23, 25 and 27). For 2019-20, apply Circular No. 11 of 2020 clause by clause.
11. Treaty: certificate, Form 41 (Form 10F) and the ladder. The tax residency certificate for the period, Form No. 41 from the tax year 2026-27 (Form No. 10F before it), and the facts for each step of the tie-breaker: permanent home, centre of vital interests, habitual abode, nationality. Decide domestic residence first (Raghav Agarwalla, para 4).
12. Where the other State’s year is not April to March. Certificates covering every day of the Indian tax year claimed, the period of each stated in Form No. 41 (Form No. 10F); for a part-year treaty claim, the date of the move and the tie-breaker facts for each period; the 183-day count in the year of the State where the employment is exercised, tested both ways where the stay is near the limit; foreign tax apportioned under rule 76 (rule 128), with Form No. 44 (Form No. 67) in time.
13. Do not let exchange-control papers stand as admissions. Bank declarations of status under the Foreign Exchange Management Act answer a different question.
14. Frame the appeal for the later years. A residence finding affects the not ordinarily resident status of later years and, under section 2(2) of the Black Money Act, exposes income of that year and foreign assets acquired in it to that Act in later years too.

Concordance: Income-tax Act, 2025 and Income-tax Act, 1961

Subject	Income-tax Act, 2025	Income-tax Act, 1961
Scope of total income	Section 5(1), (2)	Section 5(1), (2)
Income outside India not received merely by balance sheet entry	Section 5(3)	Section 5, Explanation 1
No second inclusion on receipt	Section 5(4)	Section 5, Explanation 2
Income deemed to accrue or arise in India	Section 9	Section 9
Previous year / tax year	Section 3	Section 3
182-day limb	Section 6(2)(a)	Section 6(1)(a)
60 days with 365 in four years	Section 6(2)(b)	Section 6(1)(c)
Citizen leaving for employment or as crew of an Indian ship	Section 6(3)	Section 6(1), Explanation 1(a)
Citizen or person of Indian origin coming on a visit; 120 days	Section 6(4), (5)	Section 6(1), Explanation 1(b)
Crew of a foreign-bound ship	Section 6(6); rule 8 of the Income-tax Rules, 2026	Section 6(1), Explanation 2; rule 126 of the Income-tax Rules, 1962
Deemed residence of a citizen	Section 6(7), (8)	Section 6(1A) and Explanation
Resident for one source, resident for all	Section 6(12)	Section 6(5)
Not ordinarily resident	Section 6(13)(a) to (c)	Section 6(6)(a) to (d)
Income from foreign sources	Section 6(14)	Section 6(6), Explanation (applies for the whole section)
Person of Indian origin	Section 2(78)	Section 115C(e), Explanation
Resident; non-resident	Section 2(96); section 2(72)	Section 2(42); section 2(30)
Treaty relief	Section 159	Sections 90 and 90A
Tax residency certificate; prescribed documents	Section 159(8)(a), (b)	Section 90(4), (5)
Form and rule for the documents	Rule 75(1), (2); Form No. 41	Rule 21AB(1), (2A); Form No. 10F (rule 21AB(2) has no counterpart in rule 75)
Certificate of residence for a resident	Rule 75(3), (4); Forms No. 42 and 43	Rule 21AB(3), (4); Forms No. 10FA and 10FB
Tax deducted from a sum, other than salary, payable to a non-resident: rate and time	Section 393(2)(a), (b), Table item 17	Section 195(1)
Period for which the certificate applies, in the prescribed information	Form No. 41, item 11 (rule 75(1))	Form No. 10F, item (v) (rule 21AB(1))
Foreign tax credit: year of credit; income offered in more than one year	Rule 76(1), (2) of the Income-tax Rules, 2026	Rule 128(1) and proviso of the Income-tax Rules, 1962
Statement of foreign income and tax; time for furnishing it	Rule 76(10) to (13), (16); Form No. 44	Rule 128(8), (9); Form No. 67 (no counterpart to rule 76(16))
Disputed foreign tax	Rule 76(5), (6), (15); Form No. 45	Rule 128(4) and proviso
Refund of foreign tax already credited	Rule 76(14)	Rule 128(10)
Provisions more beneficial; Chapter on general anti-avoidance applies regardless	Section 159(4), (6)	Section 90(2), (2A)
Relief where there is no treaty	Section 160	Section 91
Draft order and Dispute Resolution Panel for a non-resident	Section 275	Section 144C
Board’s orders, instructions and directions	Section 239	Section 119
Repeal and savings	Section 536(2)(c), (j)	Not applicable

Decisions referred to in this Part

Decision	Court and date	Cited for
CIT v. Sri O. Abdul Razak	Kerala High Court, 13 December 2010	“Employment” includes own business or profession abroad
ACIT v. Nishant Kanodia	Income-tax Appellate Tribunal, Mumbai, 8 January 2024	Investor running own company abroad within Explanation 1(a)
British Gas India (P) Ltd., In re	Authority for Advance Rulings, 31 July 2006	Existing employee on deputation leaves for employment
Binny Bansal v. DCIT	Income-tax Appellate Tribunal, Bangalore, 9 January 2026	Explanation 1(a) only in year of leaving; Explanation 1(b) only for non-residents; second departure rejected; permanent home in owned property
Additional Director of Income-tax v. Sudhir Choudhrie	Income-tax Appellate Tribunal, Delhi, 6 March 2017 (as set out in Binny Bansal)	Considered on the visitor relief
PCIT-15 v. Binod Kumar Singh	Bombay High Court, 22 April 2019	Travels of a person who has migrated are visits
CIT v. Suresh Nanda	Delhi High Court, 25 February 2013	Residence a question of fact on day counts; 182 days for citizens; history of the figure
CIT (C)-I v. Shri Suresh Nanda	Delhi High Court, 27 May 2015	Involuntary stay under an unlawful restraint excluded; no thumb rule
CIT v. Avtar Singh Wadhwan	Bombay High Court, 20 November 2000	Salary of a non-resident for service on a foreign-going Indian ship accrued outside India, on its facts
Ruling in Petition No. 7 of 1995	Authority for Advance Rulings, 8 February 1996 (as reproduced in Pradeep Kumar Joshi)	Both day of entry and day of exit counted
Manoj Kumar Reddy v. ITO	Income-tax Appellate Tribunal, Bangalore, (2009) 34 SOT 180 (as quoted in Pradeep Kumar Joshi)	Day of arrival excluded; two views recorded
DIT (IT) v. Manoj Kumar Reddy Nare	Karnataka High Court (as described in Sanjay Bhaskar)	Tribunal’s order said to have been confirmed
ITO v. Fausta C. Cordeiro	Income-tax Appellate Tribunal, Mumbai, 29 June 2012	Day of arrival excluded
Pradeep Kumar Joshi (deceased) v. ITO	Income-tax Appellate Tribunal, Ahmedabad, 29 October 2021	Day of arrival excluded
Sanjay Bhaskar v. DCIT	Income-tax Appellate Tribunal, Delhi, 30 December 2025	Day of arrival excluded; employment relief applied in later years
Union of India v. Azadi Bachao Andolan	Supreme Court, 7 October 2003	“Liability to taxation is a legal situation”; Circular No. 789
ADIT v. Green Emirate Shipping and Travels	Income-tax Appellate Tribunal, Mumbai, 30 November 2005	“Liable to tax” means fiscal domicile, whether or not the UAE taxes non-corporate entities
Mohsinally Alimohammed Rafik, In re	Authority for Advance Rulings, 23 December 1994	Dubai individual with no personal tax resident for the treaty
V.V.R.N.M. Subbayya Chettiar v. CIT	Supreme Court, 21 December 1950	Onus not discharged where evidence called for is not produced
Cyril Eugene Pereira, In re	Authority for Advance Rulings, 19 May 1999	Contrary view, not accepted in Azadi Bachao
The Erin Estate, Galah, Ceylon v. CIT	Supreme Court, 22 April 1958	Residence a mixed question of fact and law (taken in Part 3)
Serco BPO Pvt. Ltd. v. Authority for Advance Ruling	Punjab and Haryana High Court, (2015) 379 ITR 256, as cited in Skaps Industries	Certificate said to end the enquiry; cannot stand with Tiger Global
Raghav Agarwalla v. ITO	Income-tax Appellate Tribunal, Mumbai, 21 October 2024	Treaty not to be used to decide domestic residence
Skaps Industries India Pvt Ltd v. ITO	Income-tax Appellate Tribunal, Ahmedabad, 21 June 2018	Section 90(4) not a limitation on section 90(2)
AAR (Income Tax) v. Tiger Global International II Holdings	Supreme Court, 15 January 2026	Certificate an eligibility condition, not a bar to enquiry
Sameer Malhotra v. ACIT	Income-tax Appellate Tribunal, Delhi, 28 December 2022	Treaty tie-breaker applied to part of an Indian year; Singapore certificate for the period
DCIT v. Kumar Sanjeev Ranjan	Income-tax Appellate Tribunal, Bangalore, 15 March 2019	Period-wise tie-breaker finding of the Commissioner (Appeals) upheld
Narinder Pal Singh v. ACIT	Income-tax Appellate Tribunal, Delhi, 7 March 2023	Calendar-year Indonesian certificate; habitual abode for January to March
Sivakarthick Raman v. ACIT	Income-tax Appellate Tribunal, Chennai, 7 July 2025	Residence of China for two calendar years covering the Indian year, accepted on the China tax returns without a certificate
Raman Chopra v. DCIT	Income-tax Appellate Tribunal, Delhi, 5 May 2016	Penalty order relied on in Sameer Malhotra; not a decision on split residence
Vishal Wanchoo v. ITO	Income-tax Appellate Tribunal, Delhi, 17 April 2026	Tie-breaker on the year’s global income remanded for facts

Part 2 takes up companies: the Indian company, place of effective management since assessment year 2017-18, the Board’s guidelines and the active business test, the older test of control and management wholly in India, and the tie-breaker for companies after the Multilateral Instrument, with open questions 7 to 10. Part 3 takes up Hindu undivided families, firms, limited liability partnerships, associations of persons, trusts and every other person, where the word “wholly” does the work, with open questions 11 to 13.

This note is general commentary on the law as at 11 November 2026 and is not advice on any matter. The position in a particular case depends on its own facts.