Mrs. Sarika, an Indian citizen, is in employment with an overseas company located in UAE. She is not liable to tax in UAE. During the P.Y. 2023-24,…

(i) Mrs. Sarika is an Indian citizen and in employment in UAE. She comes on a visit to India during the P.Y.2023-24 for 121 days. Her stay in India in the four immediately preceding previous years i.e., in P.Y. 2019-20 to P.Y. 2022-23 is 371 days (50 + 100 +76 + 145 days). Her total income, other than the income from foreign sources, during the P.Y. 2023-24 would be - Particulars Amount (₹) Salary accrued or arisen in UAE (income from a foreign source, hence, to be excluded) - Income accrued and arisen in India 2,00,000 Income deemed to be accrued and arisen in India 7,00,000 Income arising in UAE, from a business set up in India (to be included since the business is controlled from India, even though such income accrues and is received outside India) 5,00,000 14,00,000 Less: Deduction u/s 80C (LIC premium paid by cheque in India) 1,00,000 Total income (excluding income from foreign sources) 13,00,000 Mrs. Sarika, an Indian citizen, having total income other than income from foreign sources not exceeding 15lakhs and visiting India during the P.Y 2023-24, would be a resident in India for the A.Y.2024-25, if she has stayed in India for 182 days or more during the P.Y. 2023-24. Since she has stayed only for 121 days in India during the P.Y. 2023-24, she is a non-resident for the A.Y. 2024-25. Her total income during the P.Y. 2023-24 would be – Particulars Amount (₹) Salary accrued or arisen in UAE (income from a foreign source, hence, to be excluded) - Income accrued and arisen in India 2,00,000 Income deemed to be accrued and arisen in India 7,00,000 Income arising in UAE, from a business set up in India (not taxable) - Gross Total Income 9,00,000 Less: Deduction u/s 80C (LIC premium paid by cheque in India) 1,00,000 Total income 8,00,000 (ii) If Income arising and received in UAE, from a business set up in India is 10,00,000 instead of 5,00,000, her total income, other than the income from foreign sources, during the P.Y. 2023-24 would have been 18lakhs. In such a case, Mrs. Sarika, an Indian citizen, having total income other than income from foreign sources exceeding 15lakhs and visiting India during the P.Y 2023-24, can be a resident in India for A.Y.2024-25, if she has been in India for 120 days or more but less than 182 days in the P.Y. 2023-24 and during the 4 years immediately preceding the P.Y. 2023-24 for a total period of 365 days or more. Since she has stayed in India for 121 days during the P.Y. 2023-24 and her stay in India in the four immediately preceding previous years is 371 days, she would a resident in India for A.Y. 2024-25 and by default, she would be treated as resident but not ordinarily resident. In such case, income arising and received in UAE, from a business set up in India would also form part of total income of Mrs. Sarika and her total income during the P.Y. 2023-24 would be 18lakhs [8,00,000 (computed in (i) above) plus - 10,00,000]. (iii) If Mrs. Sarika comes to India in P.Y. 2022-23 for 45 days instead of 145 days, she would not be a resident in India for the P.Y. 2023-24 as per section 6(1) since her stay in India in the four immediately preceding previous years would be less than 365 days. However, since she is an Indian citizen having total income (excluding income from foreign sources) of 18lakhs, which exceeds the threshold of 15lakhs during the previous year; and not liable to tax in UAE, she would be a deemed resident in India for the P.Y. 2023-24 by virtue of section 6(1A). A deemed resident is always a resident but not ordinarily resident. In such case, her total income during the P.Y. 2023-24 would be same i.e.,18 lakhs as computed in point (ii) above.