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Residential status of an Individual

aishwarya huskur (24 Points)

09 October 2018

Mr X had died on 30th April 2017. What will be his residential status for the FY 2017-18??

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5 Replies

Rakesh Joshi (CA Final) (1272 Points)
Replied 09 October 2018

Non Resident as per Section 6(1)

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Vivan pratap singh (105 Points)
Replied 09 October 2018

will be resident only.
If he is a person of Indian origin.

aishwarya huskur (24 Points)
Replied 09 October 2018

Even if he is a person of Indian origin his total stay should be 182 days or more during that fy to become a resident ryt?

Rakesh Joshi (CA Final) (1272 Points)
Replied 09 October 2018

It is simple.. A person to be called resident need to satify the one of the basic conditions of Section 6(1).

In the above case the person who died on 30th April 2017 does not fulfill any of the basic condtion and hence he will be non resident for FY 2017-18 even though he is of Indian origin.

Vivan pratap singh (105 Points)
Replied 09 October 2018

Your content is correct but reasoning is quite illogical
The following example will show the mode of determination of residential status of a deceased when the residential status is not determinable by resort to the general provisions of section 6 of the Act–

Example : Mr. Ram died on 1-5-2017. He had earned income of Rs. 4 lakh during April 2017 from a source outside India. Mr. Ram had never left India. Are the legal representatives of Mr. Ram liable to pay any tax in respect of Mr. Ram ?

Solution : If one goes by exact wordings of section 6, one would find that Mr. Ram has become non-resident for the previous year 2017-18, as his stay in India (in fact, his stay in the world) was less than 182 days as contemplated in First basic condition of section 6(1). Going by logical reasoning and intent and purposes of the Act, Mr. Ram has to be held to be resident in India and, further so in view f section 159(1) of the Act, which provides that – “Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.”
So Had Mr. Ram not died, he would have been liable to tax in respect of his income of Rs. 4 lakh. Accordingly, the said income will be chargeable to tax in the hands of the legal representative.
In various cases, the status were determined by considering the assessee not died.
I hope this will clear your doubt, and I also shall be happy to discuss this matter in case of further doubt.