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Query on Section 6 of IT Act - In view of Binny Bansal ITAT Bangalore Judgement
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....uery on Section 6 of IT Act - In view of Binny Bansal ITAT Bangalore Judgement<br> Query (Issue) Started By: - Pankaj Singh Dated:- 14-1-2026 Last Reply Date:- 13-5-2026 Income Tax<br>Got 1 Reply<br>Income Tax<br>Good afternoon, My understanding has been that residential status under Section 6 of IT Act is to be determined independently for each FY, based only on the number of days of stay in t....
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....hat year & read with relaxation given in explanations which gives benefit of relaxed to 182 days to Citizen of India, or Person of Indian Origin who visits to India, without reference to residential status in earlier years. However, in the Binny Bansal ITAT Bangalore held that while determining residential status, it is necessary to examine whether the person was a non-resident in preceding yea....
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....rs, if yes, then only the benefit of relaxed 182 days from 60 days will be available. Views requested on following - 1. How do generally read and apply Section 6 with explanation - is it treated as year-wise independent test, or has it commonly been applied by also considering the residential status in preceding years, as interpreted by the Tribunal in the Binny Bansal case? 2. In light o....
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....f this judgment, do it is necessary to revisit and review residential status determinations of clients by examining their prior-year residential status, in line with the Tribunal's interpretation? Thanks & Regds Pankaj Singh Reply By YAGAY andSUN: The Reply: Section 6 fundamentally operates on a year-specific basis. Residential status is ordinarily determined independently for each prev....
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....ious year by applying the physical stay tests prescribed under Section 6(1), i.e., 182 days test or 60 days + 365 days test, read with applicable Explanations. The long-standing and generally accepted interpretation has been that the relaxation under Explanation 1 to Section 6 substituting 60 days with 182 days for a citizen of India or PIO visiting India, is available based on the factual char....
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....acter of the visit in the relevant year itself, without requiring the individual to establish non-resident status in earlier years. In the Binny Bansal ruling, the Bangalore ITAT appears to have read the phrase "being outside India" and "comes on a visit to India" contextually to examine the continuity of non-resident status in preceding years. The Tribunal effectively held that the concessiona....
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....l 182-day threshold is intended for persons who are otherwise residing abroad and merely visiting India, and not for persons substantially residing in India in earlier years. With respect, this interpretation is debatable. The statute does not expressly prescribe prior-year non-resident status as a condition precedent for availing Explanation 1 benefit. Historically, residential status has been....
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.... assessed independently year-to-year, except where statute specifically imports earlier-year criteria (e.g., RNOR tests under Section 6(6)). Accordingly: • The dominant professional and compliance approach continues to treat Section 6 determination as an independent yearly exercise, subject only to express statutory conditions. • Binny Bansal being an ITAT ruling has p....
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....ersuasive value but is not binding pan-India, particularly where contrary interpretations are possible from plain reading of statute. • Nevertheless, the ruling does create litigation risk in borderline "visit to India" cases where the assessee had substantial Indian presence or resident status in immediately preceding years. • As a matter of prudence, it is advisable to ....
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....revisit high-value or sensitive cases involving Explanation 1 benefit and evaluate factual continuity of overseas residence/employment/business nexus. • Going forward, documentation evidencing genuine overseas residence, employment, tax residency abroad, and temporary nature of India visits should be robustly maintained.<br> Discussion Forum - Knowledge Sharing ....