Case 1: Rohan – Overseas Work Assignment
Rohan, an Indian citizen, works for a multinational company and is deputed to Singapore. He spends 200 days in Singapore and 165 days in India.
• Income: ₹25 lakhs from India, SGD 60,000 from Singapore.
• Residential Status:
o Under Income Tax Act: He fails both conditions (182 days or 60+365 rule).
o Result: Non-Resident (NR)
o Income to be taxed in India: Only Indian income is taxable.
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Case 2: Pooja – NRI Visiting India Frequently
Pooja, based in the USA, visits India for 190 days.
• Income: ₹10 lakhs rental from Mumbai property.
• Residential Status:
o Meets 182-day rule → Resident
o Fails ROR conditions (not in India for 2/10 years or 730 days in 7 years)
o Result: Resident but Not Ordinarily Resident (RNOR)
o Income to be taxed in India: Only Indian income taxable.
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Case 3: Arjun – Student Moving Abroad
Arjun moves to Canada for studies, spending 120 days in India.
• Income: ₹5 lakhs interest from Indian FDs.
• Residential Status:
o Fails both basic conditions
o Result: Non-Resident (NR)
o Income to be taxed in India: Only Indian income taxable.
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Case 4: Neha – Dual Residency
Neha runs a business in Dubai, spends 185 days in India.
• Residential Status:
o Meets 182-day rule → Resident
o Fails ROR conditions
o Result: RNOR
o Income to be taxed in India: Indian income taxable; Dubai income exempt.
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Case 5: Manoj – Returning Sailor
Manoj, a crew member on an Indian ship, returns to India permanently.
• Stay: 90 days on visit, then permanent return.
• Residential Status:
o Visit: Explanation 1(b) applies → 182-day rule
o Permanent return: Explanation doesn’t apply
o Result: Resident if total stay ≥182 days; else NR.
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Case 6: Rajesh HUF
Karta has been resident for 3/10 years and stayed 800 days in 7 years.
• Residential Status:
o HUF is Resident and Ordinarily Resident (ROR)
o Income to be taxed in India: Global income taxable.
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Case 7: Dr. Iyer – Profession Set Up in India
Dr. Iyer moves to UAE but manages his Indian clinic remotely.
• Stay: 140 days in India
• Income: ₹13 lakhs from Indian patients, ₹2 lakhs from UAE
• Residential Status:
o Fails basic conditions → NR
o Income to be taxed in India: Indian income taxable; UAE income exempt.
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Case 8: Foreign Company with POEM in India
A foreign company with turnover > ₹50 crore has its key decisions made in India.
• Residential Status:
o POEM in India → Resident
o Income to be taxed in India: Global income taxable.
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Case 9: Jyotinder – Self-Employed Golfer
Jyotinder earns abroad as a professional golfer.
• Residential Status:
o Self-employment abroad counts as “employment”
o Explanation 1(a) applies → 182-day rule
o Result: NR if <182 days in India.
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Case 10: Abdul Wahid – Business Abroad
Abdul starts a business abroad, not salaried.
• Residential Status:
o “Employment” includes self-employment
o Explanation 1(a) applies
o Result: NR if <182 days in India.
There are Four more case studies on taxability of Income in INDIA based on residential status:
Case Study 1: Rahul Verma – NRI Returning to India
Rahul Verma has been living in Dubai since 2015, working for a logistics company. He visited India every year for 30–40 days to meet family. In FY 2024–25, Rahul returned to India permanently on 1st September 2024.
- Residential Status: Rahul stayed in India for 213 days in FY 2024–25. Since his stay exceeds 182 days, he qualifies as a Resident for that financial year.
- Taxability:
- Global Income: As a resident, Rahul’s entire global income is taxable in India.
- Dubai Salary till August 2024: Taxable in India due to global income scope.
- Post-September Salary (in India): Also taxable under Indian law.
- Key Insight: Rahul must report foreign income and assets under Schedule FA in his ITR. He may claim relief under the DTAA between India and UAE to avoid double taxation.
Case Study 2: Priya Sharma – Freelance Consultant Abroad
Priya Sharma lives in Bengaluru and took up a 6-month consultancy project in Germany starting 1st October 2024. She earned in Euros and stayed abroad until 1st April 2025.
- Residential Status: Total stay in India during FY 2024–25 is about 183 days. Priya is a Resident.
- Taxability:
- Euro Income: Taxable in India as she is a Resident.
- Indian Consultancy Work: Taxable as usual.
- Foreign Bank Interest: Also taxable.
- Key Insight: Despite earning abroad, residency status pulls Priya’s global income into Indian tax net. Foreign Tax Credit (FTC) can be claimed if tax was paid in Germany.
Case Study 3: Anil Mehta – Seafarer’s Dilemma
Anil Mehta works on international cargo ships. He was on duty offshore from 15th May 2024 to 28th February 2025.
- Residential Status: Stayed in India only for 76 days during FY 2024–25. Not fulfilling conditions under Section 6, Anil qualifies as a Non-Resident.
- Taxability:
- Salary Received Outside India: Not taxable, as the contract and payment are outside India.
- Interest from Indian Savings Account: Taxable in India.
- Rent from Indian Property: Taxable.
- Key Insight: Seafarers can benefit from Non-Resident status if their sailing period meets the prescribed limits. Proper documentation is critical.
Case Study 4: Meena Iyer – Entrepreneur Splitting Time Between India & Singapore
Meena runs a tech startup in Chennai and launched a Singapore branch in July 2024. She stayed in India for 160 days during FY 2024–25.
- Residential Status: Since she was in India for less than 182 days and doesn’t fulfill the exceptions under Section 6, Meena is a Non-Resident.
- Taxability:
- Indian Business Income: Fully taxable.
- Singapore Salary: Not taxable in India as a Non-Resident.
- Dividend from Indian stocks: Taxable.
- Key Insight: Splitting residence for business may trigger complex tax implications. Meena should review the DTAA between India and Singapore and maintain clear audit trails.