Tax Residency in India refers to the status of an individual or entity that determines their liability to pay income tax in India. It is based on specific criteria related to the duration of stay in the country during a financial year. An individual is generally considered a tax resident if they stay in India for 182 days or more in a financial year, or meet certain additional conditions related to the past years’ presence. Tax residency is important because residents are taxed on their global income, while non-residents are taxed only on income earned or received in India.
Understanding your tax residency status is crucial for compliance with Indian tax laws, filing accurate income tax returns, and planning your taxes efficiently. This status impacts how income from various sources is reported and the kind of deductions or exemptions you may be eligible for. For businesses and individuals alike, correctly determining tax residency helps avoid penalties and ensures adherence to legal requirements.
For more detailed guidance on income tax matters and how tax residency affects your tax obligations, you can visit FinTax24’s income tax solutions.