Q487. Go to Nepal from India to avoid staying in India for more than 182 days and hence

Question: Dear Sirs, A foreigner ,having OCI card, stays for 180 days in India .During the rest of the financial year he stays in Nepal. Will he be treated as NON resident for Indian Taxation purposes? Thanks to clarify! Best regards

Answer: It is not easy to answer your question with a simple yes or no! Each case is different. Generally, the purpose or shall I say the intent, the actual reason why a Indian resident leaves India, is what the tax authorities might look at rather than simply going by the number of days. Furthermore, OCI holders who generate income in India are liable to pay tax on that income regardless of the number of days they have stayed in India. A resident of India who travels abroad for purposes that do not clearly indicate an intention to stay out of India for an indefinite period would not be considered a NRI for Indian tax purposes. However, as I said earlier, each case would depend on the circumstances and the perception of the tax officer. In a situation such as described in your email, where a foreigner with OCI stays 180 days in India and spends the rest of the financial year in Nepal. The main place of residency such as where the persons permanent home is located, where income is generated etc. are considered. India and Nepal do have a tax agreement and to give you an idea, shown below is an excerpt from Article 4 of the agreement: