Section 6(1)

Section 6(1) — the law in short

What the courts have decided on section 6(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Suresh Nanda High CourtHelps taxpayerNo later treatment found
  My passport was seized and I could not leave India. Do those days count towards the 182 days?
  No, where the stay was involuntary and the seizure itself was found to be wrongful. The Delhi High Court upheld the Tribunal and held that the period for which a citizen is in India against his will, brought about by executive action later found to be without authority of law, must be excluded in calculating the period under s.6(1)(a). The test it laid down is one of animus: there must be something to show that the individual intended, or had the animus, of residing in India for the minimum prescribed duration. The Court added that this is not a thumb rule - each case has to be examined on its own facts.
• DIT v Manoj Kumar Reddy Nare High CourtHelps taxpayer
  I work abroad on deputation and came back to India for a few weeks. Do those days count against me under the 60-day test?
  No, on these facts. The Karnataka High Court declined to interfere with a concurrent finding that, excluding the time during which the assessee was visiting India, he was not in India for the requisite 60 days, so he was a non-resident and could not be taxed as a resident under s.6(1)(c). The Revenue's appeal was dismissed for want of a substantial question of law.
• ACIT v Nishant Kanodia ITATHelps taxpayer
  I left India to run my own business abroad, not for a job. Do I get the 182-day test?
  Yes. Explanation 1(a) to s.6(1) is not confined to salaried employment — leaving India to carry on business or a profession abroad falls within it. With a stay of 176 days in India, below 182, the assessee was a non-resident and the Revenue's appeal was dismissed.
• Pradeep Kumar Joshi v ITO ITATHelps taxpayer
  The AO counted 184 days and called me resident. Does the day I landed in India count?
  No - the day of arrival is excluded. The first appellate authority had counted the arrival day without giving any reason for doing so when other benches had held it must be excluded, so his computation of exactly 182 days had no basis. Adopting the Bangalore Bench's ratio that s.9 of the General Clauses Act excludes the first day of a series, the Tribunal excluded the date of arrival, held the stay was less than 182 days and held the assessment made treating the assessee as resident to be unsustainable. Only the arrival limb is decided: the order assumes, without deciding, that the departure day counts.
• Vance Robert Heffern v CIT Advance RulingHelps taxpayerSuperseded by amendment
  Our US employer has seconded a telecom manager to India and is bearing his Indian tax. He has no formal technical qualification and cannot produce his certificates. Can he still be a technician for the s.10(5B) exemption?
  Yes, on the law as it then stood. The Authority ruled that Vance Robert Heffern, seconded by ALLTEL Information Services International Holding Inc. to its group company in India as a telecom manager, qualified as a technician under s.10(5B), and that the taxes borne by his employer were exempt for forty-eight months from his arrival in India. Neither his inability to produce educational certificates nor the absence of technical education was a disqualification, because specialised knowledge may be obtained either by education or by special experience; his fourteen years in the ALLTEL group and the work he was doing in India fell within the notified field of information technology. Section 10(5B) has since been deleted from the Act.
• Monte Harris v CIT Advance RulingHelps taxpayerSuperseded by amendment
  I have become resident in India by the time I want an advance ruling, and I have filed my return in the meantime because the due date came round. Can the Authority still hear my application?
  Yes, on both objections. The Authority held that residential status for Chapter XIX-B is tested by the financial year immediately preceding the year in which the application is made, so an American software manager who had become resident in 1994-95 was still a non-resident applicant when he applied on 31 March 1995. It also held that the bar in clause (a) of the proviso to s.245R(2) bites only where the question was already pending on the date of the application, so a return filed afterwards does not defeat it. On the merits it ruled that he was a technician in information technology within the notified field and entitled to exemption under s.10(5B). The ruling binds only Monte Harris.
• CBDT Press Release 02.02.2020 on residence CBDT Circulars & InstructionsHelps taxpayerSuperseded by amendment
  I work in the Gulf and pay no tax there. Does the deemed residence rule tax my foreign salary?
  No. The Board clarified that the provision is an anti-abuse measure aimed at Indian citizens who shift their stay to a low or no-tax jurisdiction, not at bona fide workers abroad, and that income earned outside India is not taxed here unless it is derived from a business controlled in, or a profession set up in, India.
• CBDT Circular 13/2017 on seafarer salary in an NRE account CBDT Circulars & InstructionsHelps taxpayer
  My client is a non-resident seafarer and his foreign employer credits his salary straight into his Indian NRE account. Is that receipt in India?
  No. The Board clarified that salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship is not included in total income merely because it has been credited to an NRE account maintained with an Indian bank. Under s.5(2)(a) only income received or deemed to be received in India is taxable for a non-resident, and the Board treats the credit into the NRE account as not making the salary income received in India.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.