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Consider the following statements about the deemed residence rule in section 6(7) of the Income-tax…

Section 6(7) deems an individual resident only if he is a citizen of India, is not liable to tax elsewhere by reason of domicile or residence, and has total income exceeding…

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Consider the following statements about the deemed residence rule in section 6(7) of the Income-tax Act, 2025:
Statement 1: It can apply to a person of Indian origin who is not a citizen of India.
Statement 2: It applies only if the individual is not liable to tax in any other country or territory by reason of his domicile, residence or similar criteria.
Statement 3: The fifteen lakh rupees threshold is applied to total income other than income from foreign sources.
Which of the statements are correct?

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Answer and explanation

Correct answer C

Section 6(7) deems an individual resident only if he is a citizen of India, is not liable to tax elsewhere by reason of domicile or residence, and has total income exceeding fifteen lakh rupees "other than the income from foreign sources". So "Only Statements 2 and 3 are correct". Statement 1 is wrong because, unlike section 6(4), the rule does not extend to a person of Indian origin who is not a citizen.

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