Deemed Resident- Section 6(1A)
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Deemed Resident concept has been introduced from Finance Act, 2020, where from Assessment Year 2021-22, an Indian citizen shall be deemed to be resident in India only if his Total Income, other than income from foreign sources, exceeds Rs 15 Lakhs during the previous year.
For this provision, Income from foreign sources means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India).
However, such individual shall be deemed to be Indian resident only when he is not liable to tax in any country or jurisdiction by reason of his domicile or residence or any other criteria of similar nature.
Thus, from Assessment Year 2021-22, an Indian Citizen earning total income in excess of Rs 15 lakhs (other than from foreign sources) shall be deemed to be resident in India if he is not liable to pay tax in any country.
In Simple words, if a person stays 182 days or more in India, during the previous year, then such individual shall be Resident, but what else, if he stays for less than 182 days or 60 days plus 365 days in preceding 4 years (Section 6), then eventually he should be Non-resident.
but section 6(1A), bars residential status of person to resident Individual if his total income exceeds Rs 15 lakh, however still this section would be applicable only if his stay is 120 days or more but less than 180 days.
What we can conclude: If a person (Indian Citizen) stays in India for 120 days or more, but less than 180 days during the previous year, and his total income earned in India exceeds Rs 15 lakhs, then such person would be treated as Resident Individual.
Source: Income Tax Department (incometaxindia.gov.in)
Read our detailed article on Residential Status to know more about on this topic.
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