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Below The Quote On Tax Tribunal’s Ruling – Visa Type Can Impact NRI Tax Status by Preeti Sharma, Partner at BDO India

“The tax residency rules under Indian tax laws provide special relaxation to India citizens under which an Indian citizen who leaves India for the purpose of taking up employment can stay in India upto 182 days and still qualify as non-resident. Similarly, a person of Indian origin who is based outside India can travel in India upto 182/120 days and still qualify as Non-resident. Generally, tax authorities rely in copy of passport stamps submitted by tax-payers to determine the residential status. In a recent ruling pronounced by Tax Tribunal, the tax authorities had sourced travel data from Foreign Regional Registration Office (FRRO) to authenticate number of days of stay in India. Over and above, Tribunal has looked at the type of visa granted by other countries to confirm the purpose of stay of the Individual outside India. Tribunal has mentioned that anyone traveling on tourist visa may not satisfy the conditions for relaxation in residency rules.

 This is a classic example where the immigration status of an individual played decisive role in determining the tax position. Be mindful that a wrong type of visa may not only create trouble at immigration counter but also bring tax challenges.”

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