India has always followed a physical
presence test to determine the tax residency
of individuals in India. In respect of Indian
Citizens visiting India, a presence of 182
days was provided to ensure that they can
attend to personal and social affairs in India
without being regarded as a resident. However,
recently, vide Indian Budget 2020 and Budget
2021, certain amendments have been made
in Indian residency rules, which may impact
Indian citizens, especially the ones living in
countries where there is no personal tax. Determining the right residential status is
extremely important since the taxability of
various incomes of an individual – Indian as
well as overseas – depends on the residential
status.
