Page 29 - Jignyasa-June 2020

from India and still not be required to the income from foreign sources is more
declare their global income in India. than INR 15 lakhs during the relevant
previous year. Consequently, if the total
This gave rise to a serious concern for income as calculated is upto INR 15
the government due to resultant loss of lakhs, then the earlier relaxation of
revenue which was one of the trigger substituting 182 days instead of 60 days
points to bring in amendments in Section still prevails in case of such individuals.
6 of the Act.
The term ‘income from foreign sources’
B. Actual amendment has been defined to mean income which
Finance Act 2020 has amended accrues or arises outside India except
foreign income derived from a business
Explanation 1 (b) to Section 6(1) controlled in or a profession set up in
curtailing the relaxation of replacing 60
days in specific cases which now reads as India.
under (highlighted in bold):
D. Issues arising out of this
“In case of individual – amendment
being a citizen of India, or a person of
Indian origin, who, being outside India, • Difficulty in calculation of total
comes on a visit to India in any previous income
year, the provisions of sub-clause (c) shall This amendment shall apply if the
apply in relation to that year as if for threshold limit of total income other than
the words “sixty days”, occurring therein, the income from foreign sources, referred
the words “one hundred and eighty-two above, is met. Total income is defined
days” had been substituted and in case under Section 2(45) to mean “the total
of the citizen or person of Indian amount of income referred to in section
origin having total income, other than 5, computed in the manner laid down
the income from foreign sources, in this Act”. Section 5 lays down the
exceeding fifteen lakh rupees during scope of total income based on residential
the previous year,” for the words status. There are various incomes which
“sixty days” occurring therein, the can be exempt under Section 10 in case
words “one hundred and twenty days” of a Non-Resident or computed as per
had been substituted.” special provisions applicable to Non-
Resident. This results in a circular loop
Explanation — For the purposes of since, for determination of total income
this section, the expression “income threshold, one has to check the scope of
from foreign sources” means income income under Section 5, which in turn is
which accrues or arises outside dependent on residential status as per
India (except income derived from a Section 6.
business controlled in or a profession
set up in India)”
III. Amendment 2: Section 6(1A) -
Deemed Indian Resident
C. Impact of the amendment
This amendment replaces 60 days referred A. Concerns leading to the
to in second primary condition with 120 amendment
days instead of earlier 182 days for The Memorandum explaining the
certain individuals. provisions of the Finance Bill has

It should be noted that this amendment is emphasized on issues of ‘stateless
applicable only in case of Indian Citizens persons’. It was possible for such
or PIOs whose total income, other than individual to arrange his business affairs

http://www.ctconline.org 29