Determining an individual’s residential status under Section 6 of the Income Tax Act depends on the specific duration of their stay in India, yet the method for calculating this period remains highly contentious,. A significant dispute exists regarding whether to include the days of arrival and departure in the total count.
While the Authority for Advance Rulings (AAR) and the tax department argue that both days must be included—reasoning that presence for any part of a day constitutes a stay—various Tribunals and the Karnataka High Court have held otherwise. These rulings often rely on the General Clauses Act and the legal principle that the “law disregards fractions of a day,” thereby justifying the exclusion of the arrival date. Given these conflicting interpretations, appellate authorities typically adopt the view most beneficial to the taxpayer, though the ambiguity continues to trigger litigation.
ISSUE FOR CONSIDERATION
An individual is said to be a resident in India where he is in India in a year for 182 days or more, or, in the alternative, where he was in India for 365 days or more during the 4 years preceding the previous year and is in India for 60 days or more in the previous year. This period of 60 days for compliance of alternate condition is extended to 120 days or 182 days in certain cases, like seafarers, persons visiting India or leaving India for the purposes of employment. A similar condition relating to the number of days is found in respect of a person claiming the status of resident but not ordinarily resident. These provisions found in s.6 of the Act of 1961 are materially retained in the corresponding s.6 of the Act of 2025.
Determination of the number of days of stay for ascertaining the residential status is crucial on various counts and has become highly contentious. Over a period, conflicting decisions on the inclusion of the dates of arrival and/or departure and the time of arrival have been delivered on the subject. While the Authority for Advance Ruling has held that the prescribed number of days would include the days of arrival and departure, the different benches of the ITAT, in particular Jaipur, Delhi, Mumbai, Kolkata, Ahmedabad and Bangalore have held otherwise. Appeal against the decision of the Bangalore Bench has been dismissed by the Karnataka High Court.
AAR IN PETITION NO. 7 OF 1995, IN RE
In this case reported in 223 ITR 462 (AAR), the petitioner applicant claimed to be a non-resident and the sole shareholder of an unregistered company in the UAE. He opted for an advance ruling u/s. 245Q (1) of the Income Tax Act and claimed the benefit under Article 10(2)(a) of the Indo-UAE, DTAA. One of the issues relevant to our discussion, in the petition, related to the determination of the number of days of stay for ascertaining the residential status of the petitioner applicant.
The question before the Authority was whether for calculating period of stay in India, for the purposes of determining residential status of an individual under section 6(1), number of days during which he was present in India in a previous year, included the days of arrival and departure, and which therefore have to be taken into account for determination of his stay in India and not the number of days that the individual was out of India.
The Applicant submitted that he had been in and out of India on 22 occasions during the relevant financial year. According to the statement furnished by the applicant, he had been present in India for 198 days, including the days of his arrival and departure. However, by excluding the days of arrival and departure in and from India, the number of days of stay in India was 178 days only, and such stay being for less than 182 days in the financial year 1994-95, he was a non-resident and, therefore, was entitled to maintain the application under section 245Q(1).
In contrast, the case of the Income-tax Department was that the days of arrival and departure should not be excluded in counting the number of days of stay in India, but should be included in the number of days of stay in India, and as such, the applicant was a resident of India, and his application for the Advance ruling was not maintainable.
The additional contention of the applicant was that he was out of India for more than 187 days and, if so, he could be said to be in India for 178 days only, and as such, his stay in India could not have exceeded 181 days.
The Authority dismissed the application of the petitioner on the ground that he was a resident and not a non-resident, and his petition was not maintainable, and held as under: “Further, in order to be able to maintain the application, the applicant should have been non-resident in financial year 1994-95 as the application was preferred in 1995. Under section 6(1)(a), the applicant would have been non-resident in India for that financial year if his stay in India during that period was less than 182 days. But, according to the statement furnished by the applicant, he had been in India for 198 days. It was, however, contended that the applicant was present in India for 178 days. He arrived at this figure by computing the period during which he had been out of India in the said financial year and deducting it from 365 days. However, the calculation relevant for the purposes of section 6(1)(a) is that of the number of days during the previous year on which the applicant was present in India. For this purpose, the days on which the applicant entered India as well as the days on which he left India have to be taken into account. It is no doubt true that for some hours on these dates the applicant could be said to have been out of India also but, equally, it could not be doubted that the applicant was in India on these dates for howsoever short a period it may be. There was, therefore, really no absurdity in the computation worked out as 198 days. It was suggested that the actual number of hours during which the applicant was present in India should be found out and the number of days calculated accordingly. That idea seemed impractical but, assuming that this was a correct argument, no data had been furnished on the basis of which the stay of the applicant in India in terms of hours could be worked out. Therefore, the applicant was not a non-resident assessee entitled to maintain the application under section 245Q(1). The application was, therefore, to be rejected as non-maintainable.”
PRADEEP KUMAR JOSHI’S CASE,
The issue under consideration was also examined by the Ahmedabad Bench of the tribunal reported in 192 ITD at Page 577. In this case, the tribunal was asked to examine whether, while counting the number of days of stay in India for considering whether an individual was a resident or not, the day of arrival on a visit was to be excluded or not.
The question before the tribunal was, whether in determining the residential status of an individual assessee u/s 6 of the Income-tax Act for assessment year 2016-17, while counting the number of days of stay in India for determining the status of ‘resident’, the day of arrival had to be excluded and whether the assessee, having stayed in India during the year under consideration for less than 182 days, could not be considered as resident of India in the year under consideration.
The assessee, an individual, filed his return of income in the status of a non-resident, disclosing the income from other sources, being interest from REC Bonds, FDR, NRE Account, savings bank and dividend income. He also had income from salary earned from overseas employment with Oil Support Services, Dammam (outside India) and long-term capital gains, which were claimed as exempt from income tax. In the assessment, on the basis of verification of the passport, the AO held that the assessee was a resident, considering the calculation of days of stay in India. It was claimed by the assessee that he stayed in India during the year under consideration for 175 days, whereas the case of the AO was that the assessee had stayed in India for 184 days.
According to the assessee, the inclusion of both the days of arrival and of departure from India by the AO in counting the number of days of stay in India was not correct. The assessee relied upon the ruling of the Authority for Advance Rulings, vide an order dated 8-2-1996 in Petition No. 7 of 1995, In re (supra). In support of the case for excluding the date of arrival in India, the assessee further relied upon the order passed by the Mumbai bench of the Tribunal in the case of Fausta C. Cordeiro, 53 SOT 522.
The AO, however, held that the assessee was a resident u/s 6 of the Act and his income was taxable under the Act. The appeal of the assessee to the CIT(Appeals) was dismissed by him by a detailed order holding as follows:
‘5.4 However, it is seen that the appellant himself has computed a stay in India of 175 days as given in the return of income, 179 days as per the paper book and finally 176 days following the judgment of the ITAT Mumbai in ITA Nos.4933 & 4934/Mum/2011in the case Fausta C. Cordeiro. The said judgment has been perused, where the facts were as under:
“Briefly stated assessee has claimed status of Non Resident in India having worked as employee of M/s Transocean Discoverer and worked on rig Discoverer outside India. Assessee’s passport was examined to verify the number of day’s assessee was in India and AO noticed that assessee arrived seven times to India for varying periods and listed out them in a table and found that assessee had stayed in India for 187 days and accordingly he considered assessee as Resident and brought the salary to tax. The learned CIT (A) after considering the submissions of assessee accepted assessee’s contentions that assessee generally arrived late in the night after completing his work from abroad and attended to the work next day and generally left early in the morning so as to attend the work again after arriving at the destination. Then he analysed the General Clauses Act and the decision of the ITAT Bangalore in the case of Manoj Kumar Reddy vs. Income-tax Officer (IT), [2009] 34 SOT 180 and allowed assessee’s contention that his stay was less than 180 days in India during the relevant period.
The Hon’ble ITAT, Mumbai held that “We have considered the rival contentions and examined the facts. As rightly pointed out by the CIT (A), there was a mistake of taking number of days at Item No. 3. Therefore, according to AO’s own method it should be 186 days. If we exclude the date of arrival as it is not a complete day, the stay of assessee is less than 182 days. Accordingly there is no merit in Revenue appeal. The case law relied is in support of the contention that day of arrival, particularly late in the day should be excluded. If that day was excluded the stay in India by assessee was less than 180 days. Therefore, the grounds raised by the Revenue are dismissed and accordingly the appeal is dismissed.”
5.5 In this regard it is noted that the date of arrival and date of departure are stamped by the immigration Authorities at the Airports on the passport of the person travelling but the time of arrival and time of departure are not mentioned otherwise also the stamping by the Immigration Authority will be few hours after the arrivals (due to deplaning, arrival at lounge & queuing) and few hours before the departure (as passengers arrive about 3 hours before the scheduled departure of plane) and therefore for the purpose the expected time of arrival (ETA) and the standard time of departure (STD) in the tickets have to be taken. As per the relied upon judgement of the ITAT, Mumbai the days of arrival in India has to be ignored for counting of the period of stay in India if the arrival is in the late night. It is seen in the table as 5-2-3 that as the appellant is arriving early in the morning, typically around 8 AM to 9 AM and thus the day of arrival cannot be ignored and thus the number of clays of stay in India comes to 182 days as under: Table not printed.
5.6 It is worth noting that in general the appellant has taken flights from Bahrain for India (Bangalore or Ahmedabad or Mumbai) but the departure on 5-3-2016 from Mumbai is to Bangkok and the arrival on 18-3-2016 is from Bangkok i.e. the absence in India for the period from 5-3-2016 to 18-3-2016 was not for the purpose of work (the place of work being Dammam in Saudi Arabia) but has been undertaken for other purposes and managed for the purpose of reducing the stay of India below 182 days to avoid becoming the resident of India in the said financial year. In this regard it is noted that as per the existing provisions of Section 6 as applicable in the case no adverse view as to the visit to Bangkok for the purpose other than for the purpose of employment can be drawn because the conditions of maintenance of a dwelling place in India has been done away with.”
The Ahmedabad bench of the tribunal noted the observations of the CIT(A), who had found that the Mumbai bench, in the case of Fausta C. Cordeiro(supra), excluded the date of arrival, since it was not a complete day, and that while doing that, the Mumbai bench had relied upon the decisions of the co-ordinate benches of the tribunal in the cases of R. K. Sharma, (1987) SOT 1.127 (Jp.)Manoj Kumar Reddy(supra) and Gautam Banerjee (ITAT L. Bench Mumbai) in ITA No. 2374/Mum/2004 dated 18-6-2008). The bench also took note of the decision placed on record of the Karnataka High Court in the case of DIT International Taxation vs. Manoj Kumar Reddy Nare 12 taxmann.com 326, wherein the order of the tribunal on facts and findings was accepted.
The Ahmedabad bench took note of the contentions of the Departmental Representative, who, besides relying on the orders of the A.O. and the CIT(A) and the findings hereinabove, contended that ‘there is no provision under the Act that fraction of a day is to be excluded. Section 6(l)(c) provides that he should be in India for a period or period amounting in all to 60 days or more in that year. In case the fraction of a day is to be ignored when a person who is coming to India on different occasions during the previous year, then such fraction of day. i.e., day of arrival and day of departure will have to be excluded. This is not the case and the intention of the Legislature when it has provided the period or periods amounting in all to 60 days or more”
The Ahmedabad bench took note of the fact that the co-ordinate bench in the case of Manoj Kumar Reddy (supra) has relied on the decision of the Hon’ble Delhi High Court in the case of Praveen Kumar vs. Sunder Singh Makkar AIR 2008(NOC) 1099(Del.) delivered in the context of the performance of a suit by relying on the General Clauses Act.
The Ahmedabad bench held that the CIT(A), while counting the number of days of stay in India, purportedly counted the date of arrival of the assessee in India, without giving any cogent reason thereon, which, in the considered opinion of the bench, had no basis, more so when it had already been held by different benches that while counting the number of days of stay in India for considering the status of “Resident”, the days of arrival have to be excluded. The bench did not find any reason to deviate from the ratio laid down by the Bangalore bench with the identical facts in the case in hand. The bench ordered the exclusion of the date of arrival in counting the days of stay in India in the case of the assessee.
The bench thus held that the assessee stayed in India during the year under consideration for less than 182 days and could not be considered as a resident of India in the year under consideration. In that view of the matter, the impugned assessment made against the assessee, considering him as a resident of India, was held to be not sustainable in the eyes of law, and the overseas income assessed was deleted. As a result, the appeal preferred by the assessee was allowed, holding that in calculating the number of days of stay in India, the days of arrival were to be excluded.
OBSERVATIONS
s.6(1) of the Act reads as
For the purposes of this Act,-
(1) An individual is said to be resident in India in any previous year, if he-
(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or
(b) ***
(c) having, within the four years preceding that year, been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.
The main provision is followed by Explanations 1 and 2, which are not reproduced here for the sake of brevity. Both the Explanations are inserted at a later date to relax the rigours of clause (c) prescribing the period of stay in India of 60 days. Clause (c), which is an alternative to clause (a), provides that a person would be said to be a resident in India where his stay in a year is of 60 days or more, provided also that his stay during the preceding 4 years is of 365 days or more. On cumulative satisfaction of the twin conditions of clause (c), an individual is said to be resident in India, even where his stay in India does not exceed 181 days. The condition of stay of 60 days in clause (c) is relaxed in three situations narrated in clauses (a) and (b) of Explanation 1 to s.6(1) of the Act, which cases are the cases of seafarers, a person leaving India for employment outside India and a person who comes on a visit to India.
The issue for consideration here revolves in a narrow compass about how to determine whether an individual is said to be in India in any previous year for the prescribed period or periods. A person can be in India and also out of India on a given day, especially on the day of his departure and of the day of his arrival, unless the event happens exactly at midnight, when the day and the date change. The issue is about whether to include such days or to exclude them, while determining the number of days of stay in India. The Act does not prescribe any methodology for calculating the number of days in a year, nor do the rules prescribe the manner for calculating the number of days. No guidance is available in the context of s.6 of the Act. The Directorate of Income Tax (Public Relations, Publications and Publicity), in its brochure on “Determination of Residential Status under Income-tax Act, 1961” has stated that “For the purpose of counting the number of days stayed in India, both the date of departure as well as the date of arrival are ordinarily considered to be in India”.
In a general sense, a ‘day’ is the time when there is light and, in that sense, the day starts with sunrise and ends with sunset. At times, a day is taken to be a period of 24 hours. A solar day begins with midnight and ends with the following midnight; a period of 24 hours, from 12:00 midnight to 12:00 midnight of the next night. A day is usually a 24-hour period, connoting the length of time it takes the earth to rotate fully on its axis.
S.2(35) of the General Clauses Act, 1897 defines a ‘month’ to mean the period to be reckoned according to the British Calendar and s. 2(66) of the said Act defines a “Year” to mean a year according to the British Calendar. Even the General Clauses Act does not define a “day”.
The expression ‘day’ has been understood in different ways by different nations at different times. In case of Frank Anthony Public School vs. Smt. Amar Kaur, 1984 (6) DRJ 47, the Delhi High Court quoted with approval the words of Lord Coke; The Jews, the Chaldeans and Babylonians begin the day at the rising of sun; The Athenians at the fall; the Umbri in Italy begin at midday; The Egyptians and Romans from midnight; and so doth the law of Englans in many cases. The English day begins as soon as the clock begins to strike twelve p.m. of the preceding day. Williams vs. Nash, 28 L.J.Ch. 886.
In Halsbury’s Laws of England, third edition, Vol.37, pg. 84, it is said, the term ‘day’ is like the terms ‘year’ and ‘month’ used in more senses than one. A day is strictly the period of time which begins with one midnight and ends with the next. It may also denote any period of twenty-four hours, and again it may denote the period of time between sunrise and sunset.
The meaning assigned by the courts, in the context, to the word ‘day’ has been explained in the Law Lexicon by Venkatramaiah’s 1983 Edition to mean: “Day, generally speaking, is the period from midnight to midnight: the law admits not of fractions in time but, in case of necessity. [Louis Dreyfus & Co. vs. Mehrchand Fattechand ’61.C. 886]. ….The day on which a legal instrument is dated begins and ends at midnight. It is not necessary to consult the calendar to ascertain when it commences and ends. [Anderson: Law Dictionary]….”
It is settled that the law disregards fractions. In the space of a day, all the twenty-four hours are usually reckoned; the law rejects all fractions of a day to avoid disputes. Counting the date of service, which takes place in any part of the day as a day, would result in a fraction being included, and since a fraction of a day is not to be included, the limitation would begin from the next date. A day, it emerges, should be taken as a period of 24 hours and that too continuous twenty-four hours; In counting the number of days, the fraction of the day should be excluded in computing the number of days.
Section 12(1) of the Limitation Act reads as follows;
12. Exclusion of time in legal proceedings (1) In computing the period of limitation for any suit or application, the day from which period is to be reckoned shall be excluded (2) ……. Section 12(1) itself specified that for the computation of the period of limitation, the day from which the said period is to be reckoned should be excluded.
Possibilities that emerge are to exclude the days when a person arrives in India, and also the days when he departs from India. Alternatively, to include both such days on the ground that the person was in India even for a part of the day. Then there is a possibility to exclude one of these days, and yet one more is to divide the day into the number of hours and take a mean thereof and apply the test of 12 hours stay in India. There is also a possibility of excluding the day when a person has come to India after sunset and the day when he has left India before sunrise, or where he was in India for less than 12 hours.
Section 9 of the General Clauses Act, 1897 is as under —
“(1) In any (Central Act) or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time to use the word “from”, and, for including the last in a series of days or any other period of time, to use the word “to”.
(2) This section also applies to all (Central Acts) made after the third day of January 1868. and to all Regulations made on or after the fourteenth day of January, 1887.”
The Delhi High Court in the case of Praveen Kumar (supra) had an occasion to consider whether the suit before the court was filed in time. In that case, the deed of performance of the agreement dated 10.03.2002 was stipulated to take place on 30.7.2002, failing which the suit was filed on 30.07.2005 for specific performance. The suit was challenged on the ground that it was barred by time and was not maintainable. It was contended that the last date for filing the suit was 29.07.2005, and the suit was filed late by one day. In defense, the plaintiff argued that the suit was filed in time and the same was in accordance with the Order 7 Rule 11 of the Civil Procedure Code, and the Limitation Act and the General Clauses Act. In case the date set for performance, i.e., 30.7.2002, was excluded, then the limitation will commence from the next date, i.e., 31-7-2005.
The Delhi High Court referred to section 9 of the General Clauses Act to hold that, if the word ‘from’ is used, then the first day in a series of days will stand excluded, and if the word ‘to’ is used, then it will include the last day in a series of days or any other period of time. The Delhi High Court at para 28 observed that: “It is well-known maxim that the law disregards fractions. By the Calendar, the day commenced at midnight, and most nations reckon in the same manner. The English do it in this manner. We too have adopted the same. In the space of a day all the twenty four hours are usually reckoned, the law generally rejecting all fractions of a day, in order to avoid disputes. If anything is to be done within a certain time of, from, or after the doing or occurrence of something else, the day on which the first act or occurrence takes place is to be excluded from computation. (Williams vs. Burzess [1840] 113 E.R. 955) unless the contrary appears from the context. (Hare vs. Gocher F1962I2 Q.B. 641). The ordinary rule is that where a certain number of days are specified they are to be reckoned exclusive of one of the davs and inclusive of the other (R.V. Turner,(supra) p. 359).”
As per the General Clauses Act, the first day in a series of a day is to be excluded if the word from is used. Since for computation of the period, one has to necessarily import the word ‘from’ and, therefore, accordingly, the First day is to be excluded.
It is relevant to note that the ruling of the AAR is assessee-specific and is not binding on other assesseees and does not have a value of precedent. Secondly, the Authority did not have an occasion to examine the implication of s.9 of the General Clauses Act and the decision of the Delhi High Court in Praveen Kumar’s case (supra). It also did not consider the possibility of inclusion or exclusion about the number of hours and the fraction of a day, simply for the reason that such data was not made available by the petitioner applicant.
The Karnataka High Court, while dismissing the appeal of the revenue against the order of the tribunal in Manoj Reddy’s case (supra), did note the facts of the case and the findings of the tribunal and this decision of the High Court is referred to by the subsequent decisions of the tribunal.
For records, it is noted that s.32(1) granting depreciation, vide second proviso, restricts the benefit of depreciation to 50% in cases where the asset in question is put to use for a period of less than 180 days in the previous year. Likewise, the Act has many provisions that provide for limitations with reference to the number of days.
It appears that the exclusion of one of the days is not difficult and does not need extra persuasion, though the view that both days are to be included is held by the AAR and the Income Tax Department. The challenge, therefore, for an assessee is to examine whether both the days can be excluded or not. There is a good possibility of exclusion in cases where the hours of stay in India on any of these days are less than twelve hours. In such a case, applying the theory of excluding the ”fraction of the day”, such a day may be excluded.
One may also be careful to ensure that the customs authorities, in stamping the passport puts the date of actual arrival and departure to eliminate the confusion arising on account of the stamping prior to the actual time of the event.
Applying the General Clauses Act, 1897, the first date in line should be excluded in computing the number of days. Most of the cases considered by the tribunal are the cases of ”visit” to India, and therefore, in these cases, the tribunal has held that the date of arrival, being the first in line, should be excluded. Applying the principle supplied by the tribunal, basis the General Clauses Act, in computing the number of days in cases where the person leaves India for the purposes of employment, or otherwise, the date of departure should stand excluded.
One may note that the words ‘from’ and ‘to’ are not found in s. 6 of the Act and are read into the section by the courts by relying on the General Clauses Act, which inter alia does provide so in s. 9 of the said Act, relied upon by the tribunal.
While it may be true that s.6 requires one to examine the number of days stay in India and not out of India, it is also not appropriate to altogether rule out the calculation of days in India by excluding the number of days of stay outside India. In case of a person who is admittedly out of India for more than the prescribed number of days, it would not be inappropriate to derive his number of days of stay in India by excluding the number of days outside India from 365 days.
It seems that the case of the revenue for inclusion of both the days is misplaced, and even for inclusion of one of the days is debatable and is capable of two views. Under such circumstances, the view beneficial to the taxpayer should be adopted.
The issue under consideration has a very wide application and can seriously damage the cases of many taxpayers who are not vigilant about the implications of the number of days of stay in a year or years. The taxpayers, in general, are advised not to take chances and to avoid unwarranted litigation, at least in cases where it is possible for them to monitor the number of days of their stay in India. Better is for the Parliament, if not the Government, to lay down clear-cut rules to avoid any harm to unsuspecting taxpayers.
