Advance Ruling – applicant was employed abroad and was in India for 123 days in year - He is NRI and his income abroad cannot be taxed in India - AAR
An interesting question before the AAR was “Am I non-resident in India in previous year 2008-09?”
The question was recast as Whether the income earned by the applicant by way of salary from his employment in USA in the previous year 2008-09 (assessment year 2009-10) is liable to be taxed under section 5(1)(c) or any other provision of the Income-tax Act, 1961 on the basis that the applicant's status was that of a ‘resident' during that year?
The Authority for Advance Rulings held that:
For an individual who has left India for employment outside India, he should be treated as resident of India only if he was in India during the relevant period/year for 182 days or more. In other words, if an individual has spent less than 182 days in India during a previous year and was outside India for the purposes of employment, then regardless of his being in India for 365 days or more during 4 preceding previous years, he cannot be treated as a resident of India. It necessarily follows that the applicant was a ‘non-resident' during the relevant period. Consequently his income that accrued outside India in USA by reason of his employment there cannot form part of the total income taxable in India. The Department in its comments dated 28.1.10 has also clarified that the applicant may be treated as NRI as he remained in India for 123 days during the financial year 2008-09.
We bring you this latest AAR judgement today.