I have a need for some domain email addresses not to be in Zoho as a user.

For example: person1@mydomain.com and person2@domain.com are set up as users in Zoho. However person3@mydomain.com is just a forward to person3's personal email address. Similiarly for person4 to person20. I don't want to set all these people up in Zoho as users and therefore have to pay for them.

I have not configured MX to point to Zoho IP addresses. Instead, I manage the email addresses for mydomain.com with my domain registrar. For example, emails to person1@mydomain.com are forwarded to person1@zoho.com.

This all works very well except for one thing.

If I am person1@mydomain.com, I can send emails to person2@domain.com because this is a user that has been set up in Zoho. However, if I try to email person3@mydomain.com, the email fails with this message:

This message was created automatically by mail delivery software.
A message that you sent could not be delivered to one or more of its
recipients. This is a permanent error. User Unknown : person3@mydomain.com

I can email person3@mydomain.com from a non-Zoho email client. This leads me to the conclusion that Zoho will not send emails to addresses with the same domain name unless it has been set up as a user on Zoho.

I think this is incorrect behaviour. Comments and suggestions welcome.