This provision targets 'stateless' high-net-worth Indian citizens who arrange their affairs so as not to become a tax resident of any country.
### Conditions to be a Deemed Resident
An individual is deemed to be a Resident if ALL the following are satisfied:
1. He is an Indian citizen.
2. His total income (other than income from foreign sources) exceeds ₹15 lakh during the P.Y.
3. He is not liable to tax in any other country or territory by reason of his domicile, residence, or any other criterion of similar nature.
### Consequence
He shall be deemed to be a Resident in India.
His residential status is always RNOR (Resident but Not Ordinarily Resident).
Only Indian-source income + income from business controlled / profession set up in India is taxable in his hands (as per Scope of Total Income for RNOR).
Worked example
### Example 1
Example: Mr. Q, an Indian citizen, has Indian source income of ₹25 lakh in P.Y. 2025-26. He stays in India only 50 days. He is not liable to tax in any other country.
Solution:
BC1 (182 days): Fail. BC2 (60 days): Fail. Hence not a resident under Sec 6(1).
Check Sec 6(1A): Indian citizen ✓, income > ₹15 lakh ✓, not liable to tax anywhere ✓.
→ Deemed Resident under Sec 6(1A). Status = RNOR.
⚠️ Common exam mistakes
Applying Sec 6(1A) to foreign nationals — it applies only to Indian citizens.
Treating a deemed resident as ROR — he is always RNOR.
Applying Sec 6(1A) when the person is already a resident under Sec 6(1) — Sec 6(1A) is invoked only if the individual is not a resident under Sec 6(1).
Misinterpreting 'not liable to tax' as 'no tax paid' — it refers to non-coverage by the tax law of any country.
Bare-Act text Section 6(1A) · Income-tax Act, 1961 · click to expand
Notwithstanding anything contained in clause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in 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.