100 interview questions and answers based on "Residential Status and Scope of Total Income

 Here are 100 interview questions and answers based on the uploaded ICAI material on "Residential Status and Scope of Total Income":

Section A: Residential Status – Individuals (Section 6(1))

  1. Q1. What are the basic conditions for determining residential status of an individual?
    A: An individual is resident if (a) he stays in India ≥182 days in the PY, or (b) ≥60 days in PY and ≥365 days in 4 preceding PYs.
  2. Q2. When is an individual considered a non-resident?
    A: If neither of the two basic conditions are met.
  3. Q3. Who qualifies for the 182-day exception rule?
    A: (i) Indian citizen leaving for employment or as crew; (ii) Indian citizen/PIO visiting India.
  4. Q4. What if such individuals’ total income exceeds ₹15 lakhs?
    A: Then they are resident if they stay ≥182 days or ≥120 days in the PY and ≥365 days in the last 4 years.
  5. Q5. Is citizenship or domicile considered in residential status determination?
    A: No, only physical presence matters.
  6. Q6. What is the rule for deemed residency (Section 6(1A))?
    A: Indian citizens with income > ₹15 lakhs and not liable to tax elsewhere are deemed residents.
  7. Q7. Can a person be a deemed resident and non-resident simultaneously?
    A: No, a deemed resident is treated as a resident.
  8. Q8. What is the residential status of an Indian crew member on an international voyage?
    A: Period on eligible voyage is excluded per Rule 126.
  9. Q9. How is 182-day count calculated for crew?
    A: Exclude voyage period between joining and signing off dates in CDC.
  10. Q10. Does short breaks in stay in India break continuity for residential status?
    A: No, continuity is not required.

Section B: Resident but Not Ordinarily Resident (RNOR)

  1. Q11. Who is classified as RNOR?
    A: A resident who satisfies any of the Section 6(6) conditions.
  2. Q12. Mention one RNOR condition.
    A: Non-resident in India in 9 out of 10 preceding PYs.
  3. Q13. Mention another RNOR condition.
    A: Stay in India ≤729 days during 7 preceding PYs.
  4. Q14. Who is automatically RNOR?
    A: A deemed resident under section 6(1A).
  5. Q15. Can a foreign national be RNOR?
    A: Yes, if they meet conditions under Section 6(6).

Section C: HUF, Firms, Companies, Others

  1. Q16. How is residential status of HUF determined?
    A: Based on location of control and management.
  2. Q17. When is HUF resident?
    A: If control and management is wholly or partly in India.
  3. Q18. What is the role of Karta in determining ROR/RNOR of HUF?
    A: Karta’s residential history (2 out of 10 years resident & 730 days in 7 years) is considered.
  4. Q19. Residential status of firm, AOP or BOI?
    A: Resident if control and management is wholly or partly in India.
  5. Q20. Residential status of a company?
    A: Resident if it is an Indian company or its POEM is in India.

Section D: Scope of Total Income (Section 5)

  1. Q21. What is the scope of income for ROR?
    A: Global income is taxable.
  2. Q22. For RNOR?
    A: Indian income + foreign income from business/profession set up in India.
  3. Q23. For NR?
    A: Only Indian income (received or deemed in India).
  4. Q24. Is agricultural income from Nepal taxable for ROR?
    A: Yes, but exempt under Section 10(1).
  5. Q25. Is past foreign income brought to India taxable?
    A: No, if already taxed or not accrued in current year.

Section E: Income Deemed to Accrue or Arise in India (Section 9)

  1. Q26. Name types of income deemed to accrue in India.
    A: Business connection, property, salary, dividend, interest, royalty, FTS.
  2. Q27. Is dividend by Indian company to NR abroad taxable in India?
    A: Yes, deemed to accrue in India.
  3. Q28. Salary earned in India but paid abroad – taxable?
    A: Yes, if services rendered in India.
  4. Q29. Salary paid by GoI for services outside India to an Indian citizen – taxable?
    A: Yes, deemed to accrue in India.
  5. Q30. Is foreign allowance exempt?
    A: Yes, under Section 10(7).

Section F: Income Received in India

  1. Q31. What is 'received in India'?
    A: First occasion when amount is under assessee’s control in India.
  2. Q32. Is remittance from abroad taxable if already taxed abroad?
    A: No, it’s not income again.
  3. Q33. Can interest on Indian debentures received abroad be taxed in India?
    A: Yes, it’s Indian income.
  4. Q34. What about rent from property in London remitted to India?
    A: Taxable for ROR only.
  5. Q35. Is gift on marriage taxable?
    A: No, exempt under Section 56(2)(x).

Section G: Other Provisions & Examples

  1. Q36. What is POEM?
    A: Place where key managerial decisions are made.
  2. Q37. Is foreign consultancy fee for Indian project taxable?
    A: Yes, deemed income under FTS if utilized in India.
  3. Q38. What is royalty under Section 9(1)(vi)?
    A: Payment for use of IP, patents, software, etc.
  4. Q39. Are software license payments considered royalty?
    A: Yes, under amended explanation to Section 9.
  5. Q40. What is FTS?
    A: Fees for managerial, technical, or consultancy services.

Section H: Case-Based Questions

  1. Q41. Brett Lee visits India 100 days every year for 10 years. Status?
    A: Resident but Not Ordinarily Resident.
  2. Q42. Srinath (Indian citizen) visits India for 100 days. Income < ₹15 lakh. Status?
    A: Non-resident.
  3. Q43. Srinath visits for 120 days. Income > ₹15 lakh. Status?
    A: RNOR.
  4. Q44. Mr. Anand, Indian crew, stays 179 days excluding voyage. Status?
    A: Non-resident.
  5. Q45. Mr. David, Govt employee, posted abroad. Foreign allowance received. Status of income?
    A: Foreign allowance exempt under Section 10(7); salary taxable.

Section I: True/False Format

  1. Q46. RNOR pays tax on all foreign income.
    A: False – only Indian + controlled business/profession income.
  2. Q47. Stay in ship near Indian coast counts as India stay.
    A: True.
  3. Q48. RNOR condition includes 730 days in last 7 PYs.
    A: True.
  4. Q49. Deemed resident requires actual stay in India.
    A: False.
  5. Q50. Indian agricultural income is always taxable.
    A: False – exempt under Section 10(1).

Section J: Residential Status – In-Depth Conditions & Exceptions

  1. Q51. What is the significance of “60 days + 365 days” rule under Section 6(1)?
    A: It is the second condition for determining residential status for non-exceptional individuals.
  2. Q52. Who are considered “Persons of Indian Origin (PIO)”?
    A: Persons with parents or grandparents born in undivided India.
  3. Q53. Can a person be a resident in two countries at the same time?
    A: Yes, residency is determined independently by each country’s laws.
  4. Q54. What does “liable to tax” mean under deemed residency?
    A: Being subject to tax laws of a country, even if exemption applies.
  5. Q55. Who cannot be deemed resident under Section 6(1A)?
    A: Persons of Indian origin who are not Indian citizens.
  6. Q56. What income threshold triggers deemed residency condition?
    A: Total income (excluding foreign source income) exceeding ₹15 lakhs.
  7. Q57. Does receiving income in India make one resident?
    A: No, residency is based on physical presence, not income location.
  8. Q58. Can someone qualify as both deemed resident and ROR?
    A: No, deemed resident is always RNOR by default.
  9. Q59. Is the 120-day condition standalone for Indian visitors?
    A: No, it applies only if total income > ₹15 lakhs and 365 days in last 4 PYs.
  10. Q60. Do both arrival and departure dates count in stay duration?
    A: Yes, both are counted for calculating days of stay.

Section K: HUF Specific Questions

  1. Q61. What determines a HUF's residential status?
    A: The place of control and management of its affairs.
  2. Q62. What if control and management is partially in India?
    A: The HUF is treated as resident.
  3. Q63. When is a resident HUF considered ROR?
    A: If Karta is resident in ≥2 out of 10 PYs and has ≥730 days in 7 PYs.
  4. Q64. If Karta doesn’t satisfy both additional conditions, status is?
    A: Resident but not ordinarily resident (RNOR).
  5. Q65. Does having property in India make HUF resident?
    A: No, unless control and management decisions are taken there.

Section L: Companies, Firms, Local Authorities

  1. Q66. What is residential status of an Indian company?
    A: Always resident in India.
  2. Q67. What determines residency of a foreign company?
    A: Place of effective management (POEM) in India.
  3. Q68. Is POEM applicable to all companies?
    A: Only to companies other than Indian companies.
  4. Q69. What is POEM?
    A: Place where key commercial decisions are made in substance.
  5. Q70. Can a firm be resident even if only part of management is in India?
    A: Yes.
  6. Q71. Are partners’ residencies considered for firm’s residential status?
    A: No, only firm’s own management matters.
  7. Q72. What is the residential status of a foreign NGO managed from India?
    A: Resident if control is in India.
  8. Q73. Can a firm be RNOR?
    A: No, only individuals and HUFs can be RNOR.
  9. Q74. Local authority with head office abroad – resident?
    A: No, if control is entirely outside India.
  10. Q75. What is the residency test for an artificial juridical person?
    A: Location of control and management.

Section M: Scope of Total Income – Case Based

  1. Q76. Is UK dividend taxable for RNOR?
    A: No, unless it’s from a business controlled in India.
  2. Q77. House rent from London remitted to India – taxable for NR?
    A: No, since it's foreign income not deemed to accrue in India.
  3. Q78. Interest on Indian debentures received in London – taxable?
    A: Yes, income deemed to accrue in India.
  4. Q79. Salary received abroad for services in India – taxable?
    A: Yes, as salary is earned in India.
  5. Q80. FTS rendered outside but utilized in India – taxable?
    A: Yes, deemed to accrue in India.

Section N: Income Deemed to Accrue in India

  1. Q81. Is salary earned in India taxable for a non-resident?
    A: Yes, always taxable.
  2. Q82. Government salary for services abroad – taxable?
    A: Yes, if paid to an Indian citizen.
  3. Q83. Foreign allowance for Indian Government employee – taxable?
    A: No, exempt under Section 10(7).
  4. Q84. Interest paid by Indian company for loan used abroad – taxable?
    A: No, if loan used for business outside India.
  5. Q85. Is royalty received by a non-resident from Indian company taxable?
    A: Yes, if used in India.
  6. Q86. Is technical fee received abroad by non-resident taxable?
    A: Yes, if services are utilized in India.
  7. Q87. What’s excluded from “royalty” definition?
    A: Consideration chargeable as capital gains.
  8. Q88. Is free gift above ₹50,000 from resident to RNOR taxable?
    A: Yes, deemed to accrue in India.
  9. Q89. Technical services provided abroad but used for Indian project – taxable?
    A: Yes.
  10. Q90. Dividend received abroad from Indian company – taxable?
    A: Yes, it is deemed Indian income.

Section O: Practical Application & Illustration-Based

  1. Q91. Mr. B stayed 70 days in India in PY and 355 days in prior 4 years. Status?
    A: Non-resident.
  2. Q92. Mr. Anirudh’s UK rent remitted to India – taxable for NR?
    A: No, only taxable for ROR.
  3. Q93. Brett Lee, not Indian citizen, visits India 100 days each year. Status?
    A: Resident but not ordinarily resident.
  4. Q94. Srinath visits India 120 days, income > ₹15 lakhs. Status?
    A: Resident but not ordinarily resident.
  5. Q95. Gift on wedding received by ROR – taxable?
    A: No, exempt.
  6. Q96. Income from Germany business controlled from Delhi – taxable for RNOR?
    A: Yes.
  7. Q97. Interest on UK bonds received in India – taxable for NR?
    A: Yes, to the extent received in India.
  8. Q98. Income from Nepal agriculture received there – taxable?
    A: Only for ROR; not for RNOR or NR.
  9. Q99. FTS received in Colombo for Indian services – taxable?
    A: Yes, as services used in India.
  10. Q100. Is royalty for software license taxable in India?
    A: Yes, considered royalty under Section 9.

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