Test Of Tax Residency – Evolving Contours

Tax residency is governed by the provisions of the Indian Income-tax Act, 1961 ('IT Act'). An individual is considered as tax resident in India for a given year, if either (a) he/she is in India for at least 182 days in that year, or (b) he/she is in India for at least 60 days in that year and at least 365 days in immediately previous four years. In a recent judgment¹, the Tribunal held that aside from these conditions, even the purpose of visit outside India and the necessary visa requirements would be taken into account while determining residential status in India. In this article we shall seek to understand this position better and its implications qua taxation of individuals in India.