Residential Status and Tax Implication of Global Income

[PRIYAM KHAMBHATA]

Respected Sir

My one client is Indian Citizen, he earned Incomes from Salary, Capital gain and Income from other sources in India. He has also deputed at Dubai to perform additional work, by his current India employer, from September 2025. His total income of Rs. 3 cr. (including Rs.75 lakh salary income earned from additional duty at Dubai) for the FY 2025-26. His Return of Income filed for the FY 2025-26 relevant to AY 2026-27 as `Resident and Ordinary resident'.

Now, for the Tax year 2026-27, his job profile are same as per the preceding previous year 2025-26. His total income would be Rs. 4 cr. (including Rs.1.5 cr. Salary income from Dubai). during the tax year 2026-27, he would be came in India for 4 months only. He would be stayed 8 months in Dubai, ie . 122 days stay in India during the Tax year 2026-27

In view of the above facts of the case, what will be Residential Status for the Tax Year 2026-27, and also would be taxed his Salary Income of Rs 1.5 cr., being global income, for the Tax year 2026-27.

Please guide me.

[Sanjeev Agarwal]

Subject to verification of actual residential status for Tax Year 2026-27, the individual's Indian residential status must be determined afresh; ROR status in FY 2025-26 does not automatically continue.

Under Section 6 of the Income-tax Act, 2025, 122 days in India does not meet the 182-day test. However, if the individual is an Indian citizen visiting India, and income other than foreign-source income exceeds Rs. 15 lakh, the 120-day threshold may apply. If the individual also stayed in India for at least 365 days during the preceding four tax years, he may be Resident but Not Ordinarily Resident (RNOR). The "leaving India for employment" exception requires examination separately, since the deputation began in September 2025.

If RNOR or non-resident, salary attributable to employment duties performed in Dubai is generally not taxable in India, provided it is first received outside India and is not otherwise deemed to accrue in India. If first received in India, or if the individual is ROR, the tax result may differ. The Indian employer's identity alone does not make Dubai-duty salary taxable in India.

Conclusion: RNOR appears possible, but the result is subject to verification of actual residential status in the current tax year, day-counts for the preceding four years, whether the India stays constitute visits, and where the Dubai salary is first received.

AI Summary

Residential status determines whether Dubai employment salary enters Indian taxable income, depending on day counts, visits, and receipt location.
Residential status must be determined independently for each tax year. A 122-day stay in India does not satisfy the 182-day test, but the 120-day threshold may apply to an Indian citizen visiting India whose income other than foreign-source income exceeds Rs. 15 lakh and who meets the preceding four-year stay requirement. Salary for duties performed in Dubai is generally outside Indian taxation for a Resident but Not Ordinarily Resident or non-resident if first received outside India and not otherwise deemed to accrue in India.