NRI status and tax: Job search abroad part of non-resident stay, rules Mumbai ITAT

ITAT) in Mumbai has ruled in favour of an individual who claimed non-resident status for tax purposes as he had spent 210 days abroad for work and job search, according to a TOI report by Lubna Kably. The tribunal clarified that an individual’s tax residency status must be decided only based on the number of days spent in India.

M Gulati, the taxpayer, did not disclose his overseas income of Rs 1.2 crore for the financial year 2015-16, asserting that he was a non-resident because he stayed in India for less than 182 days. The Income-tax department, however, contended that of the 210 days spent outside India, 28 days were used to search for employment and thus should not be counted. Based on this, the department treated him as a tax resident, making his global income taxable in India.

The ITAT rejected this argument and held that days spent abroad for seeking employment must be considered as valid for determining non-resident status. The tribunal referred to Explanation 1 to section 6(1) of the Income-tax Act, which provides that if a person leaves India for employment purposes, they will be considered a tax resident only if they stay in India for 182 days or more in that year.

The tax officer had earlier revised Gulati’s days abroad, excluding 28 days of job search, and concluded that he was in India for more than 182 days, making him a resident. Based on this, the officer brought Gulati’s overseas salary of Rs 86.2 lakh and interest income of Rs 2.8 lakh under India’s tax net. This view was also supported by the