Page 30 - Jignyasa-June 2020

in such a fashion that he is not liable to be deemed to be resident in India
tax in any country or jurisdiction during a in that previous year, if he is not
year. In the light of current development liable to tax in any other country or
in the global tax environment where territory by reason of his domicile
avenues for double non-taxation are or residence or any other criteria of
being systematically closed, necessary similar nature.”
amendment has been brought in vide
Finance Act 2020. C. Impact of the amendment
An Indian Citizen having total income,
B. Actual Amendment other than income from foreign sources

A new sub-section (1A) has been more than INR 15 lakhs in any Previous
inserted in Section 6 which is one of the Year shall be deemed to be a resident
significant amendments brought in by the in India if he is not liable to tax in any
Finance Act 2020. other country by way of residence or
domicile or any other similar criteria.
Section 6(1A) reads as under (highlighted The threshold of INR 15 lakhs was not
in bold):
there in the original proposal of Finance
“Notwithstanding anything contained Bill 2020 but has been subsequently
in clause (1), an individual, being a incorporated in the Finance Act 2020.
citizen of India, having total income,
other than the income from foreign For ease of understanding, the Section
6(1A) is dissected below:
sources, exceeding fifteen lakh
rupees during the previous year shall

Section 6(1A) Key Points
Notwithstanding anything contained in Section 6(1A) overrides section 6(1)
clause (1)
an individual, being a citizen of India PIOs are not covered here
having total income, other than the The term “income from foreign sources”
income from foreign sources, exceeding means income which accrues or arises
fifteen lakh rupees during the previous outside India (except income derived from
year a business controlled in or a profession
set up in India)

Thus, there is an issue of circular
reference in calculation of total income as
discussed above
shall be deemed to be resident in India in The term “not liable to tax” is not defined
that previous year, if he is not liable to
tax in any other country or territory by
reason of his domicile or residence or any
other criteria of similar nature

D. Issues arising out of this other country or territory by reason of his
amendment domicile or residence or any other criteria
of similar nature. The term “not liable to
• The term “not liable to tax” tax” is not defined under the Act.
Section 6(1A) shall be applicable when
the individual is “not liable to tax” in any

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