ITAT Rules: Self-Employment Included in Employment

In accordance with Section 6(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act), an individual would be considered as an Indian tax resident if he has stayed in India for a period of 365 days or more within 4 years preceding the relevant financial year and has stayed in India for a period of 60 days or more in the relevant financial year. However, explanation–1(a) to section 6(1) of the IT Act further extends the period of 60 days and substitutes the same to 182 days in case of an Indian citizen who has left India for the purpose of employment outside India.

The Hon’ble Mumbai Income-tax Appellate Tribunal (hereinafter abbreviated as “ITAT”) in the case of the Assistant Commissioner of Income Tax Vs. M/s Shri Nishant Kanodia (“the Taxpayer/ Assessee”) has recently passed a ruling that for the purpose of Explanation 1(a) to section 6(1) of the Income Tax Act, 1961 (herein after referred to as “IT Act”), the term “employment outside India” shall include self-employment such as doing business.

A brief overview on the said judgement of the Mumbai ITAT is covered in attached Newsflash.


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